CANBERRA - Australia's prime minister has said that the federal government will acquire an embattled regional airline if no buyer can be found.

Anthony Albanese on Wednesday said that the government will work on "contingency plans" for Regional Express (Rex) Airlines - including preparations for a potential acquisition - if administrators fail to find a suitable private sector buyer.

Rex, Australia's third-largest airline, entered voluntary administration in July 2024 shortly after attempting to expand its services to routes between capital cities. The airline previously connected capital cities to regional centers.

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Albanese said on Wednesday that the airline's collapse "endangers" regional communities' access to capital cities.

He said that the government would work with administrators and shortlisted bidders to find a buyer committed to providing ongoing service for the regions as well as good governance and value for money.

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If those negotiations fail, he said that the federal government would work with state governments on an acquisition.

It would make the airline Australia's first nationally-owned carrier since Qantas was privatized in 1995.

The government in November announced 80 million Australian dollars ($50.3 million) to keep Rex's regional flights operating until June 30 and has intervened to ensure it keeps its slots at Sydney Airport.

Administrators have been given until the end of June to find a buyer for the business.