The introduction of Rex as a competitor to Qantas and Virgin on the'golden triangle'routes will cause problems for the competition regulator.
Aviation group Regional Express has managed to ride out the coronavirus storm,recording no net loss in revenue in fiscal 2020 thanks to government handouts.
Australia's major and regional airports say Qantas,Virgin and Regional Express owe them at least $17 million in unpaid landing fees and other charges.
The regional airline is pushing ahead with plans to take on Qantas and Virgin Australia in the lucrative"golden triangle"between Australia’s three largest cities.
The regional carrier intends to raise about $200 million to lease around 10 narrow-body jets and will hire pilots,cabin crew and ground staff.
The federal government is considering further financial support for the aviation sector as Qantas,Virgin Australia and regional carriers face an unprecedented industry downturn.
Airlines cancelled flights to regional towns on Tuesday,including to fire-ravaged areas on the NSW South Coast,due to bushfire smoke making it too dangerous to fly.