(Transcript from World News Australia Radio)
Politicians, unions and the national carrier's main competitor, Virgin, have all weighed in to the debate.
Qantas wants the laws changed to allow an easing of foreign ownership restrictions, saying without a substantial injection of money the airline risks becoming uncompetitive.
Thea Cowie reports.
(Click on audio tab above to hear full item)
The Qantas Sale Act currently limits foreign ownership of the airline to 49 per cent and Qantas boss Alan Joyce wants the government to look at changing this.
Mr Joyce says Qantas will not be able to compete on the same terms as its rivals if it doesn't have the same access to foreign capital.
Virgin Australia is raising 350 million dollars by issuing new shares to existing shareholders, including its three major owners - Air New Zealand, Singapore Airlines and Etihad Airways.
The foreign airlines currently own 63 per cent of Virgin Australia, and that could increase to almost 70 per cent after the share issue.
Virgin Australia's foreign ownership could rise to 80 per cent without the need for any further regulatory approval, while the airline retains all traffic rights afforded to Australian airlines.
Mr Joyce has described the situation as a "virtual takeover" of Virgin Australia by foreign airlines, and he's warning the government it could distort the domestic aviation market.
Treasurer Joe Hockey has called for a national debate on the issue.
The opposition says the government should consider taking a small equity share in Qantas to help it remain competitive
But Mr Hockey says Australians have to decide whether they are prepared to pay for a national airline or let it fall into majority foreign ownership.
"We all, as Australians, need to carefully consider whether we retain restrictions on shareholdings on Australian companies, and if we do in the national interest then we need to be prepared to pay a price for that. And as far as I'm concerned, we should not be in the business of putting taxpayer's money or putting taxpayer guarantees on the table if it's not the view of the taxpayers that that should happen."
The Opposition says Mr Hockey is acting irresponsibly by considering changes to foreign-ownership restrictions in Qantas.
Opposition Transport spokesman Anthony Albanese says it is critical to keep Qantas Australian-owned to ensure that Australians caught up in natural disasters and other emergencies overseas can travel home safely.
"Australia needs a national airline that is majority Australian owned, that the policy implications behind walking away from that are much greater than people outside the industry might think. It's not simply a matter of ownership not mattering. Ownership matters for air services agreements; ownership is the foundation stone of the global aviation industry."
The Australian Council of Trade Unions secretary Dave Oliver says keeping Qantas viable is vital for Australia's economy and its workers.
"Qantas has been around now for over 90-odd years. It's an airline that employs over 30,000 people. It supports regional Australia. It's had a history over many years of employing apprentices and training up its workforce. And that's something we want to ensure should continue."
The discussion has brought a swift response from Virgin Australia which argues any additional funding for Qantas needs to be matched with an equal amount for Virgin.
Virgin Australia's chief executive John Borghetti says he's not opposed to a change in the rules governing Qantas but Australia needs two strong airlines to keep the market competitive.
"If Australia truly wants a level playing field then any measures that the government plans to take to support Qantas should be offered to Virgin Australia. Virgin Australia has succeeded against all odds in a very difficult market with a major and dominant competitor that is three times its size and it appears intent of flushing it out of the market. If any government support was given to the dominant player we would expect the same level of support."
The government says there are a number of proposals being debated but it says a decision on Qantas funding will be made in the long term and not the short term.
