Sydney Airport faces a major shake-up of how flights are scheduled and who can get access, as the federal government seeks to quash alleged issues of "slot hoarding" by Qantas and Virgin at the nation's biggest airport.

A company majority-owned by Qantas and Virgin has been in charge of deciding which carriers get access to limited and in-demand time slots at Sydney's Kingsford Smith gates.

The pair have been accused of keeping spaces for themselves even when they did not have flights to run in those slots, as a tactic to lock out competitors.

Transport Minister Catherine King has now opened a tender for that slot management job as part of an effort to make that system more transparent.

"Our reforms to the slot system at Sydney Airport are an important part of improving competition and significantly increase transparency," Ms King said.

But the former head of the competition watchdog, Rod Sims, said management of airport slots should not be open to any carriers, and they should be excluded from bidding for the job.

"Make it arms-length from all the players," Dr Sims said.

"Whether it's Qatar or British Airways, but certainly not Qantas, Virgin or Rex, they should have no say in it."

Slot changes follow collapse of Rex, Bonza

Regional airline Rex last week entered voluntary administration and will no longer fly between capital cities — the second airline to collapse this year after budget carrier Bonza also folded.

Shadow Infrastructure Minister Bridget McKenzie said the government had allowed the two airlines to collapse before acting.

"Labor should have started reforming Sydney Airport slots a year ago, instead of allowing a company majority-owned by Qantas and Virgin to make the decisions on allocating precious slots without any oversight," Ms McKenzie said in a statement.

Bonza had never applied for slots at Sydney Airport.