Prime Minister Tony Abbott wants to relax rules that block an overseas firm from owning more than 25 per cent of the flag carrier, and which limit overall foreign ownership to 49 per cent.
Qantas has struggled to compete in a price war with Virgin Australia, which is backed by Etihad, Singapore and Air New Zealand.
The company last week posted a pre-tax loss of A$252m (£135m) and unveiled plans to cut 5,000 jobs.
Critics of the rule change claim that even more Australian jobs could disappear, as the law limiting foreign investment in Qantas also ensures that the firm is headquartered and operated chiefly in Australia.
Opposition politicians, including mining tycoon Clive Palmer, have said they will fight to keep the firm in Australian hands. Qantas has admitted that the changes “have little chance” of passing through the Senate.
“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,” the company said on Monday.
Qantas said Australian subsidiaries of JP Morgan, HSBC and Citi were among its top investors in August.
Europe and the United States also have limits of 49 per cent foreign investment in airlines, pushing firms into strength in numbers through code shares and alliances.