Anthony Albanese sparks outrage for his comments about Rex

Anthony Albanese has again hit out at endangered airline Rex, saying the regional carrier should not have tried to break into the lucrative city routes.

The Prime Minister says it is critical that regional communities 'continue to have access to aviation services'.

But he has deflected criticism that his government's perceived lack of action on improved access to slots at Sydney Airport was part of the problem for Rex.

'There are a range of issues relating to Rex,' Mr Albanese said on Thursday.

'One is that a regional airline made decisions to invest in routes that they hadn't previously gone in.

'Sydney to Melbourne is not a regional route. It is one of the top-10 routes in the world and at various stages has been literally No.1 in the world.

'It is a tough industry, aviation.'

Opposition transport spokeswoman Bridget McKenzie accused Mr Albanese of running a 'protection racket for his favourite airline Qantas'.

She said Rex entered the capital city route competition with a $150m investment from its partners and when Virgin was grounded during the pandemic.

'For the Prime Minister to stand up and say that Rex doesn't have the right, the expertise or the skill to actually compete against his favourite customer, Qantas, I think says a lot about this Prime Minister's view of Qantas,' she told Sky News.

'He's run a protection racket for that particular airline since coming to power, and it continues.'

Regional Express Holdings Limited went into voluntary administration late on Tuesday, leading to the cancellation of flights on its Boeing 737 services between capital cities.

But flights between regional locations on its Saab 340 fleet are so far unaffected.

The Transport Workers' Union said more than 600 jobs had been lost in the move, with 360 jobs set to be made redundant.

Ernst & Young has been appointed as voluntary administrators for Rex, and Samuel Freeman, Justin Walsh and Adam Nikitins are set to manage the administration.

The government has repeatedly said Rex provided important links with regional communities, particularly with capital cities and would work with the administrators.

The competition for access to major airports, such as Sydney, at prime times was considered to be an issue - which Mr Albanese rejected.

'Regional slots have been guaranteed at Sydney airport for a long period of time (and) there is some reforms suggested that have been recent,' he said.

'The former government was there for a decade, didn't do anything about it. We are doing something about it as a result of the recommendations.'

Senator McKenzie said the Albanese government needed to help Rex and improve competition in the aviation sector, dominated by Qantas and a revived Virgin.

'The government has to have a plan and longer term has to do something to improve competition for airlines in this country because we've seen two airlines who sought to bring competition to the table go into administration in under four months under his leadership.'

Rex's fall into administration followed the collapse of upstart regional airline Bonza earlier this year.

Senator McKenzie said the government could have changed the slots process, but neither Mr Albanese or Transport Minister Catherine King had acted.

'She put out a press release, she's done actually nothing to change the situation to make it easier for other competitors against Qantas.'