is entirely fair Qantas receive proportional support, VA shouldn't be allowed to end up in a better relative position because of government support
Except its not entirely fair and that's the issue. Virgin actually have a
need for the funding to survive, Qantas at this stage are merely saying 'if he gets some I want some'.
Remember Qantas is not Australian owned either (admittedly more so that VA). The relevance of a funding agreement cannot be limited by who owns most of the company, as at the end of the day nearly every employee, contractor, and supplier IS Australian.
All going to plan the loan is repaid and no harm done, or it's not and the goverment takes an equity stake of a size none of us know - perhaps more than half. All of a sudden VA will no longer be majority foreign owned anyway.
Of course the cards might all collapse anyway but if that is delayed a couple of years then in all likeliness the rest of the economy will be in a better position to absorb the fall out.