Budget airline Tigerair will axe five domestic routes and cut its fleet by a third, with regional centres the hardest hit.

Key points: Virgin Australia has scrapped mostly regional Tigerair routes and reduced its fleet in response to ongoing losses

Virgin Australia has scrapped mostly regional Tigerair routes and reduced its fleet in response to ongoing losses The company says the coronavirus crisis is having a "weakening effect" on international and domestic travel

The company says the coronavirus crisis is having a "weakening effect" on international and domestic travel One aviation expert says Virgin's decision does not come as a surprise and that it should just merge the two airlines

Virgin Australia, which owns Tigerair, announced the measures on Wednesday while confirming it had lost almost $100 million in the past six months.

In a statement, Virgin said the coronavirus crisis was having a "weakening effect on international and domestic demand".

Virgin Australia CEO Paul Scurrah told ABC's The Business his airline had taken drastic steps to combat its fallout.

"We've taken some pretty dramatic action today with capacity, that's the prudent thing to do to set us up for long term profitability, but it's also going to set us up to get through the immediate challenge," he said.

Coffs Harbour on the NSW Mid North Coast has lost flights to Sydney and its only direct route to Melbourne.

"It's a sad day for the Coffs Coast," said Martin Wells from the Chamber of Commerce.

"We aren't too excited about losing that affordability for tourism."

Mr Wells said it was another hit for the region off the back of bushfires, flooding and the departure of the global auto racing World Rally Championships.

Tiger routes to be cut: Melbourne–Coffs Harbour

Melbourne–Coffs Harbour Sydney–Coffs Harbour

Sydney–Coffs Harbour Sydney–Cairns

Sydney–Cairns Adelaide–Sydney

Adelaide–Sydney Hobart–Gold Coast

Coffs Harbour City Council said Tigerair's departure from the local airport was "very disappointing", citing strong passenger bookings on its Melbourne route.

Mr Wells said he had contacted Virgin Australia and the region's state and federal MPs in a bid to fill the void.

Tiger's decision 'no surprise'

Neil Hansford, chairman of aviation consultants Strategic Aviation Solutions, said Virgin's announcement was not a surprise.

"Virgin were competing with themselves by running Tiger [in the aviation market], and Tiger was only able to really service the leisure market," he said.

"All they've probably done is by putting Tiger in there is destroy any chance of it being viable for Virgin."

Mr Hansford said since Virgin took over the low-budget airline, it had only "tinkered around the edges" and should instead merge.

"You should just merge it in with the Virgin fleet and just run Tiger as a product, not a company, and just get rid of all the overhead."

In response to Virgin's references to coronavirus, Mr Hansford said it was not likely to be affecting the five routes being dropped.

"The only place that I would suggest that would be affected by coronavirus would be on the corridor of Melbourne, Sydney and Brisbane, where a lot of the inbound Chinese tour groups might have started a tour," he said.

"These are Australian tourism, and no-one's shown any propensity that Australians are not traveling domestically."

Virgin Australia's Paul Scurrah said cancelling routes was not an easy decision, but one that had to be made to keep the business profitable.

"We will continue look at all of the routes in our network — domestic, short-haul, or long-haul — and if they have a path to profitability we will maintain that route," he said.