Qantas will begin flying the Sydney to Merimbula route, but in response Regional Express (Rex) has stated it will withdraw from also offering its services on that route.
The news comes after Bega Valley Shire Councillors discussed a proposal at their Wednesday meeting for another airline to operate passenger services on the route, albeit for an initial 14-week schedule to determine route viability.
On Friday, Qantas released a statement announcing it will launch flights from Sydney to Merimbula for the first time, "bringing much-needed competition to the route in time for the summer holidays".
From December 18, Qantas will operate four direct flights each week with its 50-seat Q300 turboprop aircraft, stating it will add flights if there is strong demand.
"With border restrictions fuelling demand for intra-state travel, we see a big opportunity to bring more tourists to Merimbula," QantasLink CEO John Gissing said.
"This will be the first time that the flying kangaroo has flown to the Sapphire Coast, which will mean more competitive fares on a route that has been a monopoly for decades."
But on Thursday, Rex's corporate communications executive Jessica Makarewitsch had written to Bega Valley Shire Mayor Russell Fitzpatrick claiming council had resolved to allow a secondary airline to begin operations.
"Given the small passenger numbers, and the competition posed by a secondary airline on a route where Rex has historically seen passenger numbers which do not support viable operations for two carriers, Rex wishes to provide formal notification that we will withdraw from the Sydney/Merimbula route permanently," she wrote.
"We will be redeploying the Sydney Airport slots currently reserved for Merimbula to other destinations.
"The Melbourne/Merimbula service may also be equally impacted."
She wrote the timing of Rex's withdrawal was yet to be confirmed.
But Mayor Fitzpatrick welcomed the move from Qantas, "to offer greater choice and value for customers, helping bring more visitors to the region".
"We decided many years ago to invest in Merimbula airport, knowing that appropriate infrastructure will attract other airlines and great opportunity for every local town and village," he said.
"There is no doubt these new services come at a good time.
"The summer bushfires and COVID-19 restrictions have hit our tourism industry hard, but with improved access to this beautiful part of the world we can now work towards a strong recovery."
To celebrate its new route, Qantas is launching a three-day sale with fares available from $149 one-way, unless sold out prior.