Australians travelling between small towns could catch an electric plane in future, with the country's biggest regional airline confirming a significant investment in an aviation startup.
Regional Express, best known as Rex, on Friday said it had secured a 20 per cent stake in Sydney firm Dovetail Electric Aviation.
The deal follows a strategic partnership between the companies revealed in July last year, and comes four months after Dovetail secured a $3 million federal government grant to fund the development of electrically powered planes.
Dovetail business operations manager Rachael Barritt told AAP the partnership showed the aviation industry was serious about reducing its carbon emissions.
"It's really exciting to see an Australian airline actually put their money where their mouth is in terms of sustainable aviation," she said.
"Electric aviation in Australia is an extremely difficult task and we are excited to work with Rex on this ambitious project."
Ms Barritt said the company plans to hold a demonstration flight in the next year, and have its first battery-powered aircraft certified within three years.
While larger airlines were investing in sustainable aviation fuel to cut air pollution, Ms Barritt said the cost and supply of these fuels were still in question.
"Sustainable aviation fuels sound great but there are a lot of issues with them at the moment," she said.
"When you go to electric you have a (cost) reduction of 40 per cent, and our electric propulsion system has a three times longer life than a current combustion engine."
As part of the deal, Rex has provided Dovetail with a plane to retrofit and will provide engineering support and access to testing facilities.
The regional airline operates a fleet of 61 Saab 340 turboprop planes that could be converted from fuel to electric power by Dovetail using MagniX engines.
The companies estimated electric planes could be as much as 40 per cent quieter than their turbine equivalents.
In January, Dovetail secured the $3m in funding from the government's Cooperative Research Centres Projects program, with Industry and Science Minister Ed Husic commenting that electric aviation could be a "game-changer" for regional transport.
Larger airlines are taking a different approach to cut air travel emissions, however.
Rex's investment comes less than a month after Qantas and Airbus revealed a $2m investment in a sustainable aviation fuel refinery in Queensland.
The companies, in conjunction with the Queensland government, will fund a feasibility study into a facility that could produce 100 megalitres of biofuel each year from agricultural by-products such as sugarcane and feedstock.
Construction on the refinery is expected to begin in 2024.
Australia's biggest airlines, Qantas and Virgin, have made significant investments in sustainable aviation fuel as part of their efforts efforts to meet an industry-wide goal of net-zero emissions by 2050.
