Virgin has already reduced domestic capacity across Virgin and Tigerair brands by 50 per cent and ceased its international operations in response to tightening quarantine measures.
Rex - which was already preparing for a 45 per cent reduction in capacity - said its passenger operations will halt everywhere but in Queensland from April 6 unless federal and state governments are willing to underwrite the losses.Regional Express' Ambulance Victoria fixed-wing air ambulance services will not be affected, neither will charter contracts with mining companies, freight services and pilot training at its pilot academies in Victoria and NSW.
"Failure to achieve any traction in this regard will see regional communities lose their air services for many months ahead and even after this is all over, we are afraid that some of the more marginal communities will no longer have an air service." Elsewhere, travel firm Webjet has suspended trading on the ASX as it works on a proposed capital raising.
Virgin Australia has lost 65 per cent of its market capitalisation at the same time and its share price was 5.4 cents, just above last week's historic low.