Qantas has claimed that Virgin Australia’s $350m equity raising launched last week gives the airline an unfair advantage in the aviation industry due to the influx of foreign-backed capital.
Qantas has requested the government to prevent the capital raising.
"The decision of these shareholders to invest in Virgin Australia's loss-making strategy highlights that these airlines aren't subject to the same commercial realities as Qantas," a statement by Qantas said. "We have asked federal and state governments to fully examine the motives behind the virtual takeover of Virgin Australia by foreign airlines, and to prevent destabilising of the domestic aviation industry, local tourism and jobs."
Virgin has denied the claims.
"Up until recently, Australia's corporate travel market was a monopoly for over a decade and Australian business travellers and the economy have suffered as a result of the lack of competition," a statement said.
"Virgin Australia's capacity increases since 2010 have been limited to routes that have been in need of further competition and frequencies, such as trans-continental routes and important regional routes throughout Australia.
"The capital raising... is designed to enhance Virgin Australia's liquidity and gearing position to ensure we are in a stronger position moving forward, so that we can continue to bring much needed-competition to the Australian aviation market and continue to grow jobs in Australia.