Prime Minister Tony Abbott's commitment to remove Qantas' foreign ownership restrictions has seen the airline urge the government to consider more immediate action.

Yesterday, Abbott confirmed the Australian Government will move to a single regulatory framework for all Australian international airlines, with no debt guarantee on the cards for ailing Qantas.

The announcement follows a period of intense speculation, stirred further by the airline’s revelation last week of a $252 million first half loss. Chief executive Alan Joyce announced Qantas would shed 5000 jobs as part of its efforts to reduce costs by $2 billion over a three year period.

“As soon as possible, legislation will be introduced to remove the foreign ownership restrictions and conditions that apply to Qantas’ business operations contained in Part 3 of the Qantas Sale Act 1992,” a statement issued by Abbott said.

“Removing these conditions is the best way to ensure Qantas can secure Australian jobs now and into the future.

“Australians want a strong and competitive Qantas. The existing Qantas Sale Act 1992 places restrictions on Qantas that advantage its competitors.”

The act currently prevents foreign airlines from holding more than 35% of the national carrier, with no single foreign shareholder able to take anything higher than a 25% stake. Whereas, rival carrier Virgin Australia is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad.

Under the proposed changes, Qantas' foreign ownership levels will be restricted to 49% under the Air Navigation Act 1920 (ANA) which also applies to other Australian international airlines including Virgin Australia. Any foreign investment will be subject to consideration and approval by the Foreign Investment Review Board.

Although Virgin Australia has insisted it “has no issue” with the amendment or repeal of the act, it will face opposition from Labor and the Greens due to concerns it will send jobs offshore.

Qantas reiterated its view that removal of the foreign ownership restrictions is an “important longer term objective”, but one with limited chance of passing through the Senate.

“We need immediate action to address the imbalance that has been allowed to persist for almost two years – namely Virgin’s unlimited ability to access foreign capital from government-owned airlines to fund a loss-making strategy against Qantas,” it said in a statement.

“If this proposal by the government to change the Qantas Sale Act is not passed, we would expect the government and the parliament to consider alternative measures to balance the unlevel playing field in Australian aviation.”

But, Abbot described this solution as the “best policy response” to the difficulties currently faced by the Flying Kangaroo, “levelling the playing field” with other Australia-based airlines.

He confirmed that the necessary legislation would be finalised and implemented “as soon as practicable”.

Meanwhile, the offer of a debt guarantee has not been placed on the table because it would undermine the government’s commitment to “not play favourites”.

“If you do something for one, in fairness you’ve got to do it for all and this is a Government which is not in the business of favouring one company over another,” he said. “We’re in the business of trying to ensure that all Australian companies – all Australian enterprises – are given the best possible chance to flourish.”

Instead, he underlined the government’s commitment to abolishing the carbon tax which represented a $106 million hit on Qantas’ bottom line in the last financial year.

“This is a very significant burden that Qantas is carrying that it shouldn’t carry,” he said.