Virgin Australia says it is pleased with the government’s decision to support greater foreign ownership of rival Qantas.

The government has announced it wants to repeal a section of the Qantas Sales Act, opening the way for majority international ownership of Qantas’s domestic arm.

Qantas had asked the government to change the Qantas Sale Act to allow more foreign investment, arguing the strings attached to the act hampered its ability to compete on a level playing field with its rivals.

Federal cabinet on Monday rejected a debt guarantee sought by Qantas but agreed to repeal part of the Act that stops foreign airlines from holding more than a 35 per cent of Qantas or a foreign shareholder holding more than a 25 per cent stake.

Mr Abbott said that under the proposed changes, Qantas foreign ownership would be limited still by the Foreign Investment Review Board and the Air Navigation Act.

“They do have to have 51 per cent Australian ownership, they do have to have their headquarters and the substance of their business based in Australia,” Mr Abbott said.

Virgin on Tuesday said it had no problem with the government’s move.

“We have said many times that Virgin Australia has no issue with the amendment or repeal of the Qantas Sale Act,” the airline said in a brief statement on Tuesday.

Labor and the Greens say they will oppose the legislation – expected to be introduced into parliament this week – claiming the proposal will send jobs offshore.