Australian PM says easing Qantas restrictions not unreasonable-media

PERTH, Australia, Dec 14 (Reuters) - Australian Prime Minister Tony Abbott has backed calls from embattled Qantas Airways Ltd (QAN.AX) to have restrictions that include limits to foreign ownership eased as the carrier faces a record loss and increased competition, local media said.

Abbott said the request from Qantas for a "level playing field" with competitor Virgin Australia Holdings Ltd (VAH.AX), which is not subject to the same restrictions, was not "an unreasonable request".

"Where we can be helpful we will certainly try to be helpful but as I understand it, what Qantas wants is to be unshackled," Abbott told the Australian Financial Review on Saturday.

"They want to be able to compete with Virgin on a level playing field and that ultimately means that changes to the legislative environment in which they operate," he said.

The Qantas Sale Act, legislated in 1992, limits foreign ownership of Qantas to 49 percent and also requires the airline to keep the majority of its maintenance operations in Australia.

The airline has long complained that Virgin Australia's access to foreign funding, via its major shareholders Gulf carrier Etihad, Singapore Airlines (SIAL.SI) and Air New Zealand (AIR.NZ), has created an unfair playing field.

Last week Qantas warned of a record first-half loss on rising fuel costs and declining ticket prices and said 1,000 jobs would be cut. Its shares plummeted to their biggest one-day loss in almost 18 months and Standard & Poor's downgraded the airline to junk status.

The government is keen to decide on short-term measures to assist the airline before Christmas and to legislate changes to the Qantas Sale Act in the longer-term, the newspaper reported, citing unidentified sources. Abbott last week ruled out direct government subsidies for the national carrier Qantas.

In other comments reported on Saturday, Abbott ruled out extra taxpayer support for Toyota Motor Corp (7203.T) to remain in Australia after General Motors Co (GM.N) announced its exit last week.

"I think there's every chance that we can keep Toyota but the level of assistance that Toyota can expect is roughly the same level of assistance that they have previously received," he said in an interview with the Sydney Morning Herald.