Regional Express airlines has confirmed it will stop flying between Merimbula and Sydney no later than March next year, when the regional airline network subsidy ends.
A spokesman for Rex says it wont be viable for the network to continue once Qantas comes into the market.
He says the Melbourne Merimbula route is also in jeopardy.
Bega Valley Shire Council, which is the owner of Merimbula airport, has been negotiating with Qantas to establish a link in the region and has agreed to a 14 week trial of a four day a week service between Sydney and Merimbula, starting in December.
Rex says passenger numbers won't support two airlines.
Bega Valley Shire mayor Russell Fitzpatrick says Rex is currently flying into the region three times a week.
He says he looks forward to Qantas coming on board and says Rex has had to make a "commercial decision".
The Rex spokesman says the Sydney Moruya route will not be affected