Queensland will "stop at nothing" to keep Virgin Australia's headquarters in Brisbane after NSW confirmed it could throw the airline a financial lifeline if it moved its base to Sydney.
Virgin is carrying about $5 billion in debt and its domestic and international business has been hit due to the impact of the coronavirus.
The carrier has been seeking federal help to keep running but the Morrison government has rejected its request for $1.4 billion, despite claims airfares could spike if the domestic market was left mainly to Qantas.
The Queensland government has offered $200 million to help rescue Virgin, but only if it keeps its Brisbane HQ.
However, NSW Premier Gladys Berejiklian on Monday said they could try to bring Virgin and its subsidiary Tiger Airways to Sydney.
"We're considering all the options we have moving forward," she told reporters on Monday.
"We're thinking about what we can do to keep as many jobs going now, but also how we can start recovering the economy during this time as well.
"If that means encouraging businesses to set up shop in NSW, if it means bringing jobs to our state we'll, of course, ... consider all those things."
She defended claims her state was competing with Queensland over the same jobs and would put Brisbane workers out of a job.
"At the end of the day, my government is responsible for NSW - I don't apologise for that," she said.
Queensland state development minister Cameron Dick on Monday demanded NSW "back off on stealing Virgin", saying "we will stop at nothing" to keep the carrier based in the Sunshine State.
NSW Premier Gladys Berejiklian has offered Virgin Australia a rescue package on condition they move their operations to the Western Sydney Source: AAP
"New South Wales might want to bring a pea-shooter to the fight; we will bring a bazooka and we're not afraid to use it," he said.
"At a time when their jobs hang in the balance, the 1200 Queensland families who depend on those head office jobs should not have to face the threat of being forced to move to Sydney."
He urged a national response.
"Virgin is flying through a cyclone and we need everyone on the ground to help the airline land.
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"The one air traffic controller that is not on duty is the prime minister. This is a national airline in a national crisis and it needs some national leadership."
He said Queensland would consider putting more money on the table.
"If there's more we need to put in we will consider that," he said.
"What is the cost of losing a second airline? We saw what happened 20 years ago when Ansett went under - it was catastrophic.
"Regional Queensland will be the loser in this."
