Jetstar will replace daily loss-making Qantas flights between Sydney and Ayers Rock with a four times weekly service from June 4.
The carrier said the Qantas operated services "have been unprofitable for a number of years" with as many as 40% of seats empty in both directions.
Qantas will also drop direct flights between Canberra and Darwin from April 1 due to poor demand.
"We know from experience that Jetstar's low fares help drive demand to tourism destinations," Qantas said. "Should market conditions change, Qantas will look at the feasibility of resuming services between Sydney and Ayers Rock."
Jetstar Australia and New Zealand chief executive David Hall added: "Low fares will help grow the market, making the region more accessible to domestic and international visitors. We expect it to be very popular."
Jetstar will operate A320s on the route. Ayers Rock becomes its 19th domestic destination.
Flights will depart Sydney at 10.30am every Tuesday, Thursday, Friday and Sunday, arriving into Ayers Rock at 1.35pm.
Return services depart at 2.20pm, arriving in Sydney at 5.45pm.