Australian airlines will be able to claim $750 a week for half of their pilots and flight attendants in a bid to ward off another round of job losses.
They can claim for 50 per cent of their air crew workforce if they can show a 30 per cent downturn since Sydney became a national COVID-19 hotspot.
Should Sydney's lockdown drag on, Deputy Prime Minister Barnaby Joyce flagged airlines could claim subsidies for a greater proportion of air crew.
"We believed it was pretty imminent that a lot of staff we're going to get put off and we had to step in there very quickly to make sure we keep these planes in the air," Mr Joyce told reporters on Monday.
"It's crucial to keep a sovereign airline capacity. It's crucial that as soon as the economy opens up, that this sector of the economy is up and running."
Airlines cannot claim payments for ground crew employed and won't be able to retrench workers if they want to be part of the scheme.
Domestic airlines will be eligible regardless of whether they're operating in a hotspot, as long as they can show they've suffered because of lockdowns.
Qantas boss Alan Joyce last week said the company was considering standing down staff in the event of a long lockdown.
Sydney's lockdown is due to expire at the end of August.
The federal government has already spent about $4.5 billion propping up airlines during the pandemic.
This latest round of assistance is estimated to cost around $100 million, depending on demand from companies.
Two existing aviation support programs, to maintain major domestic routes and ensure essential flights continue to regional communities, will be extended until the year's end.
A separate half-price flights program is also being extended to November 30.
Australian Associated Press