Deputy Prime Minister and Transport Minister Michael McCormack said the initial backing, due to expire on Monday, will be extended to cover shortfalls in operating flights on top domestic routes, even as airlines start to rebuild crushed capacity.
Australia has barred its citizens from almost all outbound travel in order to stop the spread of the new coronavirus.
With border closures and social distancing since March, Australia has avoided the high infections and casualties of many nations, reporting 102 deaths and 7,255 infections so far.
Qantas has grounded 220 planes and halted all international flights, except government repatriation charters and cargo flights.
On Thursday, Qantas said it would triple domestic capacity to 15% of normal levels by the end of the month, with the potential to rise to 40% in July if state border restrictions ease.
Virgin became the country’s first big coronavirus-related collapse, entering administration in April. It is for sale, and binding offers are due on Friday.