Prime Minister Anthony Albanese said the government would work with Rex administrators to find a buyer committed to providing ongoing service to the regions, value for money and good governance.

If that falls through, Labor will begin working on contingency plans - including preparations for a potential Commonwealth acquisition.

"The collapse of Rex ... endangers access of these regional communities throughout Australia to our capital cities and to the connectivity that is so vital for the quality of life, so vital for these local economies as well," Mr Albanese told reporters in Merimbula, on the NSW south coast.

Mr Albanese said that during the previous coalition government, Rex received substantial Commonwealth support in the form of JobKeeper payments and direct funds.

But without strings attached to the payments, Rex expanded beyond its means into capital city routes, leaving it in a "financial mess" that his government now had to deal with.

This will be the second attempt to sell Rex after it fell into voluntary administration in mid-2024.

Federal Transport Minister Catherine King said the first sales process proved that a private sale without government support was unlikely to be successful.

"My department will work with successful bidders on an incentives package from the Commonwealth government," she said.

"It is absolutely critical for regional communities that Rex continues to operate and continues to provide those services.

"We know they are flying 41 different routes every single week, and on 22 of those, they are the only airline that is available to communities to get to medical appointments, to get businesses working, to get people in and out for tourism."

With AAP.