Qantas and regional Rex Airlines know JobKeeper will end this month, but have argued for further handouts to see them through COVID uncertainty.
Qantas took drastic action to cut its workforce, grounded most of its fleet and last week posted a record loss of more than $1 billion for the first half of the 2020/21 financial year.
"It's been a very sad year," Qantas domestic and international chief executive Andrew David on Wednesday told the Senate inquiry into the future of Australia's aviation sector post-COVID-19.
Qantas wants further "ad hoc" border closures ruled out as Australia's vaccine program rolls out, warning of further redundancies if national cabinet doesn't sort out a national approach.
"If we saw state borders close again the impact is going to be huge," Mr David said.
Quizzed about forecasts for 40 to 50 per cent of international business to return by November, just in time for Christmas bookings, Qantas said this is based on assumptions about the rollout of COVID-19 vaccines.
But the airline doesn't expect to be back to pre-COVID levels until 2024, seeing no service for its A380s until the end of 2023.
"We're very conscious of the need in the aviation sector for continued support," Treasurer Josh Frydenberg told reporters on Wednesday.
"There has already been substantial support but the government recognises the need to retain a domestic sovereign capability in our aviation sector.
"We're all very much focused on other initiatives that we may be considering with respect to aviation and other areas of need."
Qantas wants the government to extend and enhance all aviation support packages at least until international borders reopen, and add training grants, but didn't argue for the JobKeeper support payment to be extended beyond March 31.
International Transport Workers' Federation spokesman Scott McDine called for an "AviationKeeper" wage subsidy to replace JobKeeper, which ends on March 31, and shared data about 18 countries doing more than Australia to support the industry's workforce.
"You've got to have a workforce that can respond post-pandemic," Mr McDine said.
Regional airline Rex wants an extension of the federal Regional Airline Network Support program beyond its March 28 snapback to keep routes viable, and some form of assistance to keep airline crews available.
Rex has been accused by rivals of using federal handouts to fund an expansion into the market's golden triangle, adding Australia's busiest route between Sydney and Melbourne to its schedule this week.
"It's certainly not true at all," Rex deputy chair John Sharp said, arguing Rex was profitable and debt-free, owned its fleet, buildings, pilot training units, and had raised capital for its new operations.
He also welcomed extra powers given to the competition watchdog to monitor the behaviour of Qantas.
The Qantas motto is the "spirit of Australia" but he questioned whether that meant "beating up the little guy".
Catering and cargo handler dnata Australia's chief executive Hiranjan Aloysius said some of its remaining staff hadn't worked since April 2020.
Excluded from JobKeeper because dnata is owned by a foreign government, he said he axed 2500 workers as revenue slumped by 90 per cent and another 1500 remained stood down and ineligible for JobKeeper.
"They are being treated differently to others in the aviation industry," Mr Aloysius said.
"They pay their taxes, raise their families here and support their local communities."
Committee chair and Labor senator Glenn Sterle said: "To see Australian workers, Australian taxpayers treated so shabby - it is nothing short, in my opinion, of a national disgrace."
Australian Associated Press