The federal government faces several hurdles before it passes laws allowing Qantas to have majority foreign ownership and offshore some of its operations.
The federal government could allow Qantas to shift its maintenance, training and other operations overseas as it paves the way for majority foreign ownership.
The government on Tuesday confirmed reports that work was under way on drafting changes to the Qantas Sale Act, which currently restricts foreign ownership of the national carrier to 49 per cent.
The laws as they stand require the airline to keep most of its maintenance, catering, flight operations and training facilities for its international services in Australia.
Transport Minister Warren Truss said the government was drafting changes to the Act, in relation to both its ownership restrictions and “what it has to do in Australia”.
“We have indicated an interest in being prepared to seek to legislate to take away the legislative and government-imposed disadvantages that Qantas faces on the domestic market,” Mr Truss said.
“We are working on legislation to achieve that.”
Qantas is reported to be preparing to announce on Thursday it will axe thousands of jobs as part of its efforts to find $2 billion in savings.
Opposition Leader Bill Shorten asked Prime Minister Tony Abbott in parliament how selling Qantas would stop Australian jobs going overseas.
Mr Abbott said the government wanted the “iconic business” to flourish.
“For that to happen, two things are necessary. First it needs to be able to compete on a level playing field and second it does need to put its own house in order,” Mr Abbott said.
“Qantas is doing its best to put its own house in order and this government will do what it can to ensure it has a level playing field on which to compete. That is the best things we can do for Qantas.”
However the amendments are unlikely to pass the Senate before or after July 1 given that Labor, the Greens and the Palmer United Party want Qantas to remain a majority Australian company.
The issue was raised in the coalition’s joint party room meeting in Canberra, where Brisbane MP Teresa Gambaro argued that Qantas should not be offered a government debt guarantee.
She said this would turn Qantas from an “800 pound gorilla into a Godzilla” and make it harder for Virgin Australia to compete.
Australian Greens deputy leader Adam Bandt said his party would not support legislation to provide a debt guarantee unless jobs were protected.
“The Greens won’t be waving it through without looking seriously at how we can protect local jobs,” he told reporters.
Transport Workers Union national secretary Tony Sheldon said Qantas’ management had let down workers with its poor investment decisions of recent years.
“Each baggage handler, check-in staff and ramp worker generates a $205,000 return to Qantas above the cost of their employment,” Mr Sheldon said.
“Sacking them is like a tradesman selling his tools to pay a one-off bill.”
Qantas declined to comment on its plans before Thursday’s half-year results announcement.
However it said it would be making some tough decisions as part of a cost-cutting program.
An Essential Media Communications poll released on Tuesday found 52 per cent of voters opposed increased foreign ownership of Qantas.