Regional Express Airlines has called on Orange City Council to provide a 70 per cent cut in taxes the airline has to pay.
In a letter to council and mayor Reg Kidd the airline, which is set to stop all services in NSW, said it was facing a financial crisis.
Warrick Lodge, Rex general manager of network strategy, said Rex was "fighting to survive" long enough for the world to return to normal after the coronavirus pandemic.
"We would like to request that council shows its recognition of the contributions of Rex to your community by providing a 70 per cent reduction of the head tax [a fee paid by the airline per passenger] payable from April 1 to December 31 2020," he said.
"This will be critical to the survival of Rex and with it the longevity of the air services to your community if Rex manages to survive this carnage."
It has set a deadline of Wednesday March 25 for a council response.
"Should this reduction not be possible, the route may not be commercially viable with the sharp reduction in passenger numbers and we may have to reduce further the already sharply reduced schedule planned for Orange or be forced to suspend services altogether until such time that Rex is strong enough to service your community again," he said.
Cr Kidd said council recognised the enormity of the situation but it also had many other fees and payments to make.
"Council will have to sit down and have to consider this very seriously," he said.
However, Cr Kidd said Rex was a "very large overseas company" that was to receive federal government help.
He said the council needed to pay staff at the airport.
On Monday Rex announced it would cut all flights to Orange as part of a closure of its services, except to Queensland from April 6 unless it received major financial help.
It comes as Orange's other current commercial passenger airline Fly Corporate has announced it will be suspending services from Orange from 1pm on March 25.
Fly Corporate CEO Andrew Major said state border closures meant they could not fly interstate.
"The airline is targeting resumption of operations in the second half of 2020 but this will be governed by the extent of impact of the COVID-19 pandemic," he said.
Neither airline is offering refunds now, but instead are offering credit toward a future flight.
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