The worsening COVID-19 pandemic has had a serious impact on airlines around the world, with travel - particularly by air - dramatically reduced in recent weeks before Prime Minister Scott Morrison tightened restrictions to become a travel ban this week.

The federal government has announced a rescue package worth more than $700 million for Australia's major airlines - with planes grounded and staff not able to work.

But FlyPelican executive director and owner Marty Hawley says the company does not qualify for a level of financial help that will allow it to survive beyond the ongoing crisis.

Mr Hawley told the Newcastle Herald the airline, which operates out of Newcastle Airport, needs at least a $1 million loan guarantee - though the business would still take a hit in that case.

"With all these travel restrictions, our daily revenue has been cut by 95 per cent of what it was two weeks ago," he said.

"What the government has put out for small to medium enterprises, that guarantee of $250,000, is nice but it seems to be a one size fits all approach.

"All we're asking is that they don't just look at the Qantas, Virgin and Regional Expresses of the world.

"It's a matter of survival."

Mr Hawley said the business directly employed 33 people and indirectly led to about 150 jobs. He said the company was the state's only 19-seater commercial airline, which meant it serviced "critical" routes to regional NSW - including Taree, Ballina, Mudgee, Cobar and Dubbo - which were not viable for larger operators.

The company is not traded on the stock exchange, it does not have a large pool of investors it can go to for support and it leases its aircraft. Mr Hawley said government help was crucial to "keep the airline alive".

Federal Labor's transport spokesperson Catherine King said she had written to Deputy Prime Minister Michael McCormack - who holds the transport portfolio - calling for more support for small regional airlines.

"With the coronavirus outbreak rapidly evolving and demand for domestic aviation services reducing daily, many regional airlines are facing severe cashflow issues," she said.

"The federal government's economic response measures and aviation package do not do enough to support this vital industry. The $250,000 loan guarantees included in Sunday's support package aren't nearly enough to meet airlines' ongoing fixed costs."

Newcastle MP Sharon Claydon said she had also written to Mr McCormack about the issue.

"FlyPelican helps business activity, jobs and regional economic growth across the state," she said. "It's unthinkable we should lose it."

Paterson MP Meryl Swanson said keeping jobs in regional areas was "vital now more than ever".

"If we don't back this vital Hunter-based regional airline now, it will have a devastating impact on the people who work in the sector, as well as the communities that rely on the services," she said.

We have removed our paywall from our stories about the coronavirus. This is a rapidly changing situation and we want to ensure our readers are as informed as possible. If you would like to support our journalists, you can subscribe here