Workers have been laid off and up to 600 jobs are at risk as regional airline Rex entered voluntary administration.
The airline’s ambitious move to compete with Qantas and Virgin Australia on major city routes has been a failure and it has immediately shelved all jet service.
The big two airlines have said they will honour Rex tickets subject to availability.
All Rex Boeing 737 jets have been grounded but its traditional turboprop regional outback services will continue.
However, the failed strategy could finish the airline.
The federal government is working with the airline and administrators to save these essential service routes, some of which are not served by any other airline.
Rex also has fleet of Saab 340 turboprops, which connect cities with small remote towns.
It serves 56 destinations, with many of them very remote.
“This is a challenging day for our industry and we are sad to see Rex enter voluntary administration with the immediate suspension of its Boeing 737 operations,” Qantas said.
“We know this will be a difficult period and we stand ready to assist.”
