Grounded Queensland-based airline Barrier Aviation says it has been pushed to the brink of collapse because of an official investigation into its operations.

The Civil Aviation Safety Authority (CASA) grounded the Cairns-based airline in December last year amid serious safety concerns.

It has put a halt to all of the airline's operations between Cairns, Horn Island, Darwin, Gove, Papua New Guinea and the Pacific Islands.

The matter is going before the Federal Court today.

Barrier Aviation managing director and part-owner David Kilin says there is a real risk it will have to close its doors unless it is allowed back into the air soon.

"Just on the basis of allegations people can find themselves unable to trade," he said.

"Basically it's a bit of a David and Goliath-type battle where the opponents have almost unlimited resources and they're very well aware of the fact that any smaller company has a very finite amount of time it can survive without income."

Mr Kilin says Barrier is losing an estimated $28,000 a day and all staff have been stood down without pay.

"It's getting more difficult with every passing day," he said.

"It's a bit hard to predict how much longer we can stay afloat.

"It's been a fairly stressful period of time - there's a very real risk we'll have to close our doors.

"Basically had to cancel Christmas - it's taking a fairly heavy personal toll on quite a lot of our staff too."

The Federal Court will hear today if CASA intends to extend the suspension.

The regulator declined to comment ahead of the hearing.