Regional Express (Rex) plans to resume domestic Boeing 737-800 services between Sydney, Melbourne and Canberra from November 15.
The airline said domestic services to South Australia and Queensland would follow once vaccination rates in those states reached 80%.
It also runs a fleet of Saab 340B turboprop aircraft and said regional intrastate services in New South Wales and Victoria would also be progressively ramped up from November 15.
Rex grounded its 737s after Australian domestic borders closed due to the surge of COVID cases but said climbing vaccination rates and easing restrictions had prompted its decision to bring the jets back into service.
Prior to the surge in COVID cases, Rex operated 737 services from Melbourne to Sydney, Gold Coast, Adelaide, and Canberra and from Sydney to Gold Coast. It had six B737s when it grounded the aircraft in July but was expecting two more in August.
The carrier said the additional planes would give it the ability to launch new routes to other capital cities, large regional centers and popular leisure destinations.
It has been competing against the Qantas Group and Virgin Australia but is set to face an additional market entrant when proposed ultra-low-cost carrier Bonza launches next year.
Bonza has yet to reveal route details or fares but has said it plans to avoid the highly competitive Brisbane-Melbourne-Sydney triangle. Instead, it will focus on regional and leisure destinations with a focus on underserved destinations or those that have previously been ignored by incumbent airlines.
The airline is helmed by former Cebu Pacific chief commercial officer and FlyArystan chief executive, Tim Jordan, and is backed by a US-based private investment firm, 777 Partners.
It will use fuel-efficient 737 MAX 8 aircraft and says it will offer consistent ultra-low-fares and new travel options.