While passenger numbers overall into Port Lincoln have continued to increase, the introduction of QantasLink services has increased the number of seats available by 170,000 a year so load factors have dropped to below 50 per cent for both airlines.

Rex network strategy and sales manager Warrick Lodge said neither airline was making a profit on the route and they were both subsidising services.

Mr Lodge told the Port Lincoln Times yesterday Rex would cut 38,000 seats a year, an 18 per cent reduction in capacity, with the worst performing flights to be cut from August 23.

This will result in six or seven return Rex flights a day rather than the current eight or nine.

"The convenience of having flight frequency spread evenly throughout the entire day will be lost and unfortunately it is the frequency and the subsequent schedule convenience that is the most significant catalyst of regional passenger growth," Mr Lodge said.

QantasLink will maintain its current schedule and senior corporate communication advisor Kristy McSweeney said passenger loads were well above expectations.

"QantasLink is fully committed to our operations in Port Lincoln."

The load factor for the route, including both airlines, was 47.8 per cent for May and Mr Lodge said passenger numbers fell by another 2 per cent in June.

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"It is once again expected that the total market will not achieve an average load factor that exceeds 50 per cent."

Load factors averaging less than 50 per cent provide enough revenue to cover Rex's operating costs but not overheads and Mr Lodge said he believed QantasLink would be in a worse situation than Rex.

"We believe the situation is much worse for our competitor as its aircraft asset cost is some 10 times higher, its pilots are paid much more and it does not have the efficiency of an extensive South Australian network to support its solitary aircraft."