JOB CUTS – Qantas’ strained relationshipswith Australia’s labour unionssank to another low last month whenQantas CEO Geoff Dixon in a statementwarned that further restructuringand lowering of the Australian flag carrier’scost base would be necessary.

The reason??

Middle East carrier Qatar Airwaysreceived government approval fordaily service between Doha and Melbourne.

In a statement, Dixon said the airline“will have no option but to achievefurther cost savings if it is to remaincompetitive” now that more carriersare gaining access to the country. ThreeMiddle East airlines, Emirates, EtihadAirways and now Qatar Airways willcompete with Qantas on routes fromAustralia to Europe.

As his well-publicised attempts tokeep Singapore Airlines from operatingtrans-Pacific services to the US viaAustralia, show Dixon is scared stiff ofcompetition, especially from these verysuccessful Middle Eastern rivals.

It is called liberalisation (or protectionif you like) Aussie-style, of whichDixon is a fervent supporter, and itmeans that no foreign airlines shouldbe allowed in Qantas’ well-protectedand highly lucrative backyard.

And if the folks in Canberra allowa rival in, just issue a warning that thisis a bad decision, which is going tocost jobs.

Mind you, this is the same airlinewhich last month revised its profitforecast by as much as 40 percent toan expected US$966 million for fiscal2008.

But that was to satisfy two shareholderswho have the potential to block theUS$8.6 billion take-over bid of Qantasby private investment group, AirlinePartners Australia.

The deal (if it goes through) is expectedto generate a personal windfallof millions of dollars for Dixon and hismates. But it is opposed by the labourunions because of concerns that thenew owners will break up the airlineand move jobs to India and China.