Staff at Aer Arann have been given protective notice, after the company decided to terminate its contract to operate Public Service Obligation (PSO) flights to the islands from December.
It is understood the letter, sent to around 20 staff members, informs them that there is no clarity about the manner in which the company will operate after 6 December.
In a dispute over the terms of its four year contract with the Government, Aer Arann served notice last June that it intended to end the four year PSO contract early.
The row between the Department of Culture, Heritage and the Gaeltacht and Aer Arann centres on an "adjustment" to the PSO payments made to the company, in the event it operates additional "non PSO" flights.
The service provider contends this makes the business unviable, the department maintains the contract clearly set out these terms.
The department says it is restricted in what can be disclosed publicly about efforts to ensure an air service to the islands remains in place after December, due to legal constraints.
However, islanders are due to meet Minister of State Joe McHugh next week.