This week a row has erupted between Rex, the Australian government's Civil Aviation Safety Authority (CASA) and the Australian Licensed Aircraft Engineers Association.

Rex has rejected claims of safety mismanagement after a call from staff for the grounding of its entire fleet.

On Wednesday Cr Shields said it was not appropriate for him to comment "at this stage because CASA is investigating".

"Also, we have our own issues to deal with," he said.

"We are discussing airport passenger fees at the moment with Rex."

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Rex has been the subject of media reports suggesting an employee's concern for the safety of an aircraft was repeatedly ignored.

An engineer was allegedly victimised by Rex after reporting a problem with a propeller.

The reported problem related to the same propeller safety issue that contributed to an incident over Sydney in 2017.

The accusations were made against Rex after a 17-page report was leaked to the press.

CASA has accused the Australian Licensed Aircraft Engineers Association of leaking the report.

A spokesperson for the trade union denied the claim on Monday.

Rex released a statement which claimed CASA was behind the leak.

The airline called the "baseless accusations" in the report the work of a "disgruntled engineer and his union".

Rex's chief operating officer Neville Howell said CASA was to blame for the bad press, not the airline's safety record.

"Some are now taking the despicable and cowardly approach of launching anonymous malicious attacks on Rex in the press," he said.

Mr Howard said Rex believed its safety culture was second to none.

Cr Shields has been seeking talks with Rex on its offer to introduce its Community Fare scheme to Dubbo City Regional Airport.

The offer of a $119 fare between Dubbo and Sydney is currently contingent on Dubbo Regional Council capping its passenger tax in line with the Consumer Price Index and waiving fees of about $350,000 a year for security screening not required under federal legislation.

Fare conditions include the purchase of tickets more than 30 days before departure, or when seats are still available 24 hours before departure.

"Some of Rex's demands are able to be met and some are not," Cr Shields said in his column in the Daily Liberal this week.

Meanwhile, head of Orange City Council's economic development community committee, Cr Jeff Whitton has backed Rex.

"If indeed they were grounded for compliance purposes [imagine] the impact there would be on Orange," he said. "It is an asset to the city."