Subsidy for regional air services reinstated after pressure from carriers

However, the $1 million a year the federal government is setting aside for the subsidy pales in comparison to the $6 million the Howard government was willing to dole out annually.

The Gillard government removed the enroute rebate scheme in 2012 when it established the carbon tax. Regional Express, the country's largest independent regional airline, was one of the most vocal critics of the decision, and repeatedly demanded the Abbott government reinstate the subsidy.

The new scheme will subsidise navigation charges on low-volume routes to regional areas.

Federal Transport Minister Warren Truss said part of the assistance would go towards supporting new routes to regional communities that did not have air-passenger services.

"It can take years for new regional routes to establish sufficient support to become viable, which is why we are providing this additional support for up to three years," he said.

The government will provide $1 million each year over the next four to assist scheduled passenger services. The funding is on top of $1 million allocated each year to aero-medical services such as the Royal Flying Doctor Service.

A spokesman for the minister said there was not the scope for the generous scheme provided by the Howard government given "the parlous nature of the books the Coalition inherited".

Under the scheme, airlines can apply for assistance for flights on routes carrying up to 15,000 passengers each year using aircraft with a maximum take-off weight of 15 tonnes.

Early this year, Regional Express demanded the Abbott government live up to its promise to reinstate the enroute rebate scheme for flights on new or low-volume routes to regional Australia.

After large losses by Qantas and Virgin Australia, Rex warned last month that regional aviation was in worse shape by highlighting the collapse of two small airlines within nine months. Darwin-based Vincent Aviation was the latest to be placed in receivership in May.