Australian Treasurer Joe Hockey is open to the possibility to remove the 49 per cent cap on ownership of Qantas Airways for the flag carrier to compete better with Virgin Australia and other state-owned airlines that undercut ticket prices.

Mr Hockey said at Australia-New Zealand leadership forum on Wednesday that he is open to removing the restrictions imposed by the 1992 Qantas Sale Act or providing the embattled air carrier with government support.

By removing the cap on foreign ownership, Qantas would be able to get more capital from overseas that would allow it to compete with foreign airlines. A Treasury spokesman said Mr Hockey was actually calling for a national debate on the Qantas Sale Act's future.

Soaring aviation fuel costs, weak consumer confidence and heated competition from rival Virgin Australia are the reasons cited by analysts who are expecting the flag carrier to once more report another net loss the past 12 months.

Morgan Stanley's estimate is that Qantas could lose up to $500 million for the current financial year because of the tough competition in the domestic market that Virgin is providing, even as its international operations continue to lose money.

In contrast, Virgin Australia spun off in 2012 its small international flights unit into a separate unlisted company, in the process attracting foreign investments from Air New Zealand, Singapore Airlines and Etihad Airways.

The competition is even expected to be tougher on 2014 as Virgin Australia launched last week an issue of new shares aimed at raising $320 million, resulting in the three foreign airlines increasing their stake in the air carrier to 72 per cent from 63 per cent.

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Qantas complains that the creation of Virgin of an unlisted subsidiary for its international operations resulted in an uneven playing field in overseas operations.

Qantas Chief Executive Alan Joyce said on Wednesday that instead of debating on removing the cap on the air carrier's foreign ownership which would take months, regulators must probe Virgin's strategy for its international operations.

Mr Joyce has even asked MPs to conduct a closer investigation of Virgin's capital raising efforts, which the rival airline defended because it allowed Qantas's tight hold on domestic business travel to ease.

"Qantas will not be able to compete on the same terms as the competition if they have access to this foreign capital, and don't care about losing money," The Sydney Morning Herald quoted Mr Joyce.