FEDERAL Transport Minister Warren Truss says the government is drafting laws to allow Qantas to be majority foreign-owned and remove other limits on the airline.

The changes to the Qantas Sales Act will lift the 49 per cent foreign ownership limit, as well as alter the restrictions on foreign airlines holding more than a 35 per cent stake and 25 per cent for any single foreign shareholder.

The airline, which is set to unveil a six-month loss on Thursday, has argued the laws distort the market and inhibit its ability to grow.

“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 told reporters in Canberra on Tuesday.

“We are working on legislation to achieve that.

“The government is philosophically attracted to levelling the playing field.” The laws also require the airline to keep most of its maintenance, catering, flight operations and training facilities for its international services in Australia.

Labor and the Greens have vowed to block the legislation in the Senate.

Mr Truss welcomed the fact that Qantas was getting its own house in order, through what was likely to be a “radical restructure”. “If there is going to be response from the government, that will have to take into account whatever Qantas is proposing to do on its own account,” Mr Truss said.

He said he had not been briefed in advance on the announcement.

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