Qantas Airways said Monday that foreigners held 52 percent of the national airline following privatization, a breach of federal regulations, but expressed confidence foreign holdings would be scaled back.

Qantas said foreign investors scrambling for a slice of Australia's largest aviation stock offering had bought 31.1 million shares too many, surpassing a 49 percent ceiling on foreign ownership in Qantas set by the Australian government.The airline said 526 million of its 1 billion shares on issue are now owned by offshore investors. The Australian government offered 75 percent of the airline July 31 on the Australian Stock Exchange.

British Airways already owned 25 percent of Qantas. Its stake is included in the 526 million foreign-owned shares.

But, as part of the government's $1.07 billion public offering, only 494.88 million shares were allowed to be sold to new foreign investors, leaving $49 million in excess foreign shares now overhanging the market.

"Those shares will have to be sold at some point, but I think the sell- down will be orderly and not have a damaging impact on the market," said one Sydney-based aviation analyst.

The analyst said a relatively lengthy period of 90 days set for foreign investors to sell their Qantas shares will prevent a scramble to unload excess Qantas stock.

Qantas gained 2 cents Monday to $1.57 on heavy turnover of 6.5 million shares on the Australian Stock Exchange. That compared with an offering price of $1.40 when the carrier publicly listed last month.

Qantas said it still was sifting through notifications of foreign ownership in the airline, a process that has been hampered by the large number of foreigners who bought shares through Australian investment firms or fund managers.

When the verification process ends, Qantas can begin notifying offshore shareholders whose purchases are above the government's ceiling. From that point, those foreign investors in Qantas would have 90 days to sell their shares.