Regional Express (Rex) has announced it will fly seven daily services between Sydney and Canberra.
The airline will launch non-stop flights between the two cities from April 19, Canberra and Sydney from April 19, Travel Daily reported.
Rex Deputy Chairman, John Sharp, accused Qantas of "fare gouging" on the route which it currently monopolises following the exit of Virgin Australia from the market.
Rex will open a lounge at Canberra Airport, with ACT Chief Minister Andrew Barr describing the deal as a "vote of confidence" in the destination.
"We are delighted to be working closely with the airline and Canberra Airport through Visit Canberra to widely promote the new services and contribute to the growth of the route," Barr said.
Flights on 33-seat Saab 340B turboprops will start from $99.
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