Winter flights from Sydney to Cooma - bringing hundreds of tourists to the region - are in jeopardy following the news that regional NSW carrier Brindabella Airlines is in the hands of receivers KordaMentha.
This development happened after it failed to recover from the grounding of eight of its 10 aircraft because of overdue maintenance checks.
All flights have been suspended indefinitely.
Paul Clarke Manager of Aviation at Snowy Mountains Airport said it was obvious that Brindabella Airlines had been experiencing financial problems for some time as they had failed to pay any fees for the past winter season.
He said "the airline was a major creditor of Snowy Mountains Airport".
Commonwealth Bank had a fixed and floating charge over the Canberra airline's assets. Brindabella said on Saturday it had "temporarily" suspended operations even though the Civil Aviation Safety Authority was allowing two of its Jetstream aircraft to remain in service.
David Winterbottom of KordaMentha said on Sunday the airline would no longer accept bookings and all flights would be suspended indefinitely.
He is calling for expressions of interest in the purchase of the business but it will not operate in the meantime.
Qantas had begun providing additional services on some of Brindabella's routes, Mr Winterbottom said.
The regional airline had a licence from the NSW government to serve as the monopoly provider on flights between Sydney and Mudgee, Cobar, Narrabri and Moree and winter-only services to Cooma.
Qantas chief executive Alan Joyce said Qantas was looking at a range of options to help the impacted communities in addition to special fares, including putting on relief flights outside our network on routes serviced by Brindabella.