Advanced Air Mobility drones in Australian aviation by 2030

But until that day comes, the federal government needs to step up its support for rural councils forced to run ageing airports at a loss, an alliance of rural mayors says.

The federal government released a Green Paper to discuss the future of the nation's aviation network. The report suggests Advanced Air Mobility (AAM) could dramatically improve aviation options for regional Australians, particularly on shorter routes between 200 and 400 kilometres.

Around the world, many companies have begun developing electric vertical take-off and landing aircraft that are similar in size to a helicopter, with both crewed and autonomous designs.

Work commissioned by the Australian government found crewed AAM could be in service by 2030, with public acceptance and use of the technology growing rapidly through the 2030s.

"Over the long-term, it is possible that Advanced Air Mobility services will improve regional air connectivity, and enable new point-to-point networks and on-demand air services for short air routes," the Aviation Green Paper stated.

"This may allow the development of a regional hub model, where larger aircraft are used to travel between regional hubs and capital cities, with shorter onwards journeys undertaken by AAM."

The report says the radical form of aviation, which can also be used for freight and cargo, could give regional airports a new lease of life.

But Regional Capital Australia chair and Albury mayor Kylie King said rural airports needed help now.

About 200 regional airports are owned and operated by local councils but rising operating, regulation and security costs means many are a burden on regional ratepayers.

"Unfortunately, the reality is most regional airports are under significant financial strain with an estimated 60 per cent of regional airports operating at a loss due," Cr King said.

RCA is calling on the federal government to provide ongoing funding for the regulatory costs in running airports, which account for 12 per cent of total expenditure, along with upgrades to regional airports and a long-term plan for the regional aviation network.

Cr King said regional Australia accounted for nearly half of the tourism sector, and regional airports were critical connecting points for international and domestic tourists.

"Regional airports are extremely hard-working community assets, with a big role to play in the life of regional Australia and indeed our nation's broader economy and security... they are too important to fail," she said.