Foreign ownership restrictions covering Qantas have been partially lifted.
But the Australian government shelved plans to axe ownership limits altogether.
Overseas investors will be able to own up to 49% of the loss-making flag carrier, up from the previous cap of one-quarter for a single foreign investor, or 35% for another airline.
Qantas had urged parliament to repeal the Qantas Sale Act – legislation that restricts the level of foreign ownership – which the airline says leaves it vulnerable to cash-rich foreign-backed competitors.
Rival Virgin Australia’s three main shareholders – Air New Zealand, Singapore Airlines and Etihad Airways – are government backed.
However, proposed changes to the act were watered down following opposition from the Labour party and Greens, who combined with minority parties to limit more ambitious plans of the Liberal-National ruling coalition of prime minister Tony Abbott, the Financial Times reported.
Opposition transport minister Anthony Albanese,said: “We have stated from the beginning that majority Australian ownership of Qantas is not negotiable.”
One logical investor in Qantas would be Emirates, given the alliance the two airlines struck last year that cemented Dubai as a stopover destination on flights between Australia and Europe.
However, Sheikh Ahmed bin Saeed Al Maktoum, the Gulf carrier’s chairman, said in May that Emirates had no plan to buy an equity stake in Qantas in spite of the Australian government’s efforts to repeal the restrictions.