Coronavirus could wipe out regional aviation unless the federal government acts decisively, Burnie-Melbourne carrier Rex has warned.
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Rex (Regional Express) said it would soon drop some routes altogether and make drastic reductions to its flight schedules in response to a virus-driven slump in passenger numbers.
Qantas - which services Devonport via QantasLink and Launceston via Qantas and Jetstar - has announced it will cut domestic capacity by about 60 per cent until at least the end of May.
It said route-by-route details would be announced in coming days.
Comment was being sought from Rex on whether its Burnie-Melbourne and King Island operations were in danger.
"Rex does not believe that Rex and all other regional carriers will be able to pull through this crisis without significant assistance if the health authorities' projections prove accurate," chief operating officer Neville Howell said in an open letter to Deputy Prime Minister Michael McCormack on Monday.
"If regional carriers collapse, so will many regional communities for which the air service is their lifeline."
Rex urged Mr McCormack to "immediately take vigorous, swift and unprecedented actions to ensure that regional aviation and, with that, regional and rural communities, is not completely and irreversibly destroyed".
It urged the government to waive various fees for a year, but said that would not be enough due to expected very negative cashflow.
Mr Howell said carriers would need extra lines of credit from the banks, and those would be "almost impossible" to obtain.
"Rex therefore calls on the federal government to provide a sovereign guarantee for any new line of credit or banking loan taken out with the banks to enable regional carriers to continue operations through to the end of the pandemic," he wrote.
He said the guarantees should only apply for loans to help overcome the effects of negative cashflow caused by the virus, not for pre-existing debts or loans.
Mr McCormack said the government would work with the airlines.
"The last thing we need is for the airlines to be in trouble," he said.
Rex said its board's financial modelling showed the crisis would be significantly worse than any it had experienced in the past.
It said the modelling was based on a "very conservative" projection of a 25 per cent drop in passengers in the next six months.
Rex entered a share trading halt on Tuesday, pending an announcement about revised profit guidance.