Councillors will be asked to vote on a reduction in airport fees and charges for Regional Express (Rex) at the next council meeting on April 8.
Rex has said passenger flights everywhere except Queensland, would cease on April 6 unless assistance of "sufficient magnitude" was forthcoming.
Council's general manager Leanne Barnes said council has a close relationship with Rex and values the service the airline provides to the Bega Valley through Merimbula Airport.
"We have always listened to Rex and considered their commercial needs. We will provide an update and report to councillors for their meeting on April 8 recommending a reduction in airport fees and charges at Merimbula. Councillors will make the final decision," Ms Barnes said.
"This is a very challenging time across a range of sectors and we understand and appreciate the particular challenges of the airline industry at this time," Ms Barnes said.
Rex said passenger numbers are down 60 per cent and expects them to drop further to 80 per cent on last year's numbers.
It has said that the government's aviation package will provide $1m a month but it expects to lose $10m a month even from the reduced schedule announced last week.
Read also: Rex cuts schedule
It has announced that all flights will cease from April 6, with the exception of flights in Queensland which are underwritten by the Queensland Government.
The company said that the decision followed an emergency board meeting on Sunday, March 22 and has said that only large subsidies and intervention can prevent what it sees as an inevitable conclusion. Passengers who booked ahead for flights have already had an indication of the situation.
Robyn's Nest owner Michael Britten said that Rex cancelled flights for four guests they were expecting who were due to arrive at Easter.
The Melbourne family were due to arrive at Easter for a 10-day holiday, something they have been doing at Robyn's Nest for the last 15 years, Mr Britten said.
"But they phoned and told us on Monday, March 16 that Rex had cancelled their flights and were offering them credits for later in the year," Mr Britten said.
On Monday, March 23 Rex said with only 20 per cent of passenger numbers left the company had reached the point "that the quasi suspension of all services at this stage presents the best option to preserve its cash".
Deputy chairman of Rex John Sharp said state and local governments should be leading the charge to assist regional carriers rather than leaving it to the federal government.
"So far the state governments have not tabled any concrete proposals although their latest decisions of closing the borders and lockdowns will simply further decimate what remains of regional air travellers. Local councils are also a true disappointment with only two councils having proposed any meaningful assistance for Rex," Mr Sharp added.
Eurobodalla Council has agreed to reduce its commercial fees at Moruya Airport for Rex Airlines.
"If an assistance package of sufficient magnitude and viability can be negotiated by the end of the week, Rex may be able to reconsider its plans to suspend services. Failure to achieve any traction in this regard will see regional communities lose their air services for many months ahead and even after this is all over, we are afraid that some of the more marginal communities will no longer have an air service."