Up to 20 RFDS jobs at Essendon Airport will be lost with Ambulance Victoria awarding the 10-year contract to supply pilots, planes and engineers to Pel-Air, a subsidiary of regional airline Rex, the majority of which is owned by two Singaporean businessmen.

The decision has sparked community outrage over Pel-Air's track record.

Pel-Air was the carrier involved in a sea crash near Norfolk Island on November 18, when the plane carrying a medical patient ran out of fuel. A report by the Australian Transport Safety Bureau found extra fuel was not being carried by the plane despite Civil Aviation Safety Authority regulations stipulating the need for reserve fuel.

Former private pilot and Essendon resident David Walsh said Pel-Air had an appalling record.

"These people fly around with pilots that run out of fuel and crash. Certainly from my perspective I'd be nervous if I had to have a mercy flight and it was with Pel-Air, but when you're injured you don't have much choice."

"I'm amazed that Ambulance Victoria awarded this after this latest incident. I've never heard anything bad about the RFDS."

Another Essendon resident and frequent visitor to Norfolk Island but who wished to remain anonymous, said the island was still outraged by the crash.

"I've got no links to the RFDS but this story [Pel-Air gaining the contract] is a hot topic on the island."

Ambulance Victoria spokesman James Howe said his organisation was in close liaison with Pel-Air since the Norfolk Island incident.

"We are comfortable that they certainly comply with all of the aviation standards in the Australian Aviation Industry.

"At the end of the day it comes down to what is the best return on our investment - [awarding the contract to Pel-Air] is actually a benefit for the Victorian taxpayer."