Regional airline Rex will commence regular daily flights between Canberra and Sydney from next month.

The airline will start with seven return flights a day and could expand to 10 return flights per day depending on demand levels.

The new flights will be welcome news for travellers, with fares starting at just $99 one way for the notoriously expensive route.

Rex deputy chairman John Sharp believes the low-cost fares may save commuters up to $100 million each year.

“At a time when many small businesses and households are still struggling to make ends meet, our fares will make a world of difference to the community that routinely sees one-way fares close to $1,000 for this short sector,” he said.

“Rex’s affordable fares will greatly stimulate more business and leisure traffic between Sydney and the national capital as the industry continues to recover.”

ACT chief minister Andrew Barr welcomed the news.

“The investment Rex is making is a vote of confidence in this city and we are delighted to be working closely with the airline and Canberra Airport through Visit Canberra to widely promote the new services and contribute to the growth of the route,” he said.

Rex will open a lounge at Canberra Airport and is currently expanding its existing airport lounge in Sydney.