Qantas: tying the flying kangaroo down Debate about airline is political slugfest that does little to ease its flight path Australians have tied their flying kangaroo down, Sport. So implies the country's treasurer, Joe Hockey, after some heavy lobbying by the kangaroo itself, Qantas. The flag carrier's shares bounced on Mr Hockey's musings about Qantas's ownership. Yet a debate about the airline is a political slugfest that does little to ease its path right now. Qantas's problems are a perennial topic for national debate. Ownership is one of the issues. The state does not own any of the airline but under the 1992 Qantas Sale Act, foreigners cannot own more than 49 per cent of it and foreign airlines, in total, cannot hold more than 35 per cent. Overseas capital is thus deterred. Its outrage, then, is understandable as it watches three foreign state-backed airlines plan to raise their stakes in Virgin Australia, its domestic rival, to 70 per cent via a A$350m ($320m) cash call. Add to that Virgin's aggressive capacity expansion, which is hurting Qantas's yields, and anyone would be hopping. Qantas's domestic unit produced 30 per cent more pre-tax profits than the group did over the past two years, underlining its key role in patching over heavy international losses. It must hurt watching Virgin burn through cash - A$425m in the 12 months to June - and turn to Etihad, Singapore Airlines and Air New Zealand, all Qantas rivals overseas, for a top-up. The fight makes it harder for Qantas to rely on home profits to support its overseas restructuring and it will divert management attention. Regulators have been called on to examine issues ranging from how Qantas uses its home heft - it has about two-thirds of the market - to whether Virgin's cash call is a foreign takeover in disguise. Mr Hockey said Qantas's "regulatory handcuffs" mean Aussies should either step up and fund the airline, or allow overseas investors to do so. It is hard to see either wanting to stump up until this battle is resolved.