Thousands of Qantas maintenance, catering and other support staff could be sacked and their jobs sent offshore if restrictions on the foreign ownership of the national carrier are lifted, transport unions have warned.
On Saturday Prime Minister Tony Abbott backed calls by the national carrier for a "level playing field" with foreign airlines, including changes to the Qantas Sale Act which caps foreign ownership of the company at 49 per cent.
The Act also requires the airline to base its support facilities for international flights in Australia, such as aircraft maintenance and catering.
Transport Workers Union national secretary Tony Sheldon said Qantas could still sell off over 10 per cent of its shares to foreign investors before it hit the 49 per cent cap. But any changes to the Act could lead to more jobs being outsourced to Asia.
"There are 30,000 Australians who have made this airline great and that want it to be great yet again," Mr Sheldon said. "Tony Abbott is giving the all-clear to slice and dice an airline that has a world-wide reputation."
Opposition Leader Bill Shorten said the airline's 5000-strong skilled maintenance workforce was at risk if foreign ownership restrictions were lifted.
"It's now time for the Australian government to fight for Australian jobs rather than simply say that the world's too hard to compete with and we should just give up and go home," he said.
Nathan Safe, the president of the Australian and International Pilots Association, said it would support changes to the Qantas Sale Act "but only if those amendments are wholly aimed at boosting the economic and social usefulness of Qantas to Australia".
"We believe there is a very real risk management might push for changes that enable the offshoring of Qantas's workforce, which would be completely counterproductive," he said.
"Any changes should come with strings attached that ensure Qantas management focuses on its Australian mainline operations instead of risky, speculative offshore ventures as has been the case in recent years."
The Coalition would face an uphill battle in passing legislation to change the Qantas Sale Act.
"The Qantas Sale Act doesn't need changing, it's the board and management that need to go," Independent Senator Nick Xenophon said. "If the failed strategies of [chief executive] Alan Joyce and the Qantas board were made into a movie, it would be called Dude, Where's My Airlin-e?"
It is understood Qantas is negotiating with the Coalition over a government guarantee that would help shore up its credit rating if it needed to borrow more funds.
A Qantas spokesman said access to foreign capital had become a "major factor" in the market. The carrier had "previously called for a review of the legislative framework that is distorting the Australian aviation market".
It welcomed Mr Abbott's comments that acknowledged the carrier was "playing on an uneven field".
"We're in ongoing dialogue with the government about how it could be levelled, but we're not in a position to comment on those discussions other than to say we're certainly not looking for a handout from taxpayers.
with Lucy Marks