Those who packed Sydney’s Ivy Room last night to send off Virgin Blue co-founder and CEO Brett Godfrey gained another insight into the death of Ansett Airlines from Max Moore-Wilton, a.k.a. Max the Axe.

Moore-Wilton, now the chairman of Sydney Airports Corporation and the Southern Cross (formerly Macquarie) Media Group, was the head of the Prime Minister and Cabinet Department when evacuated from Washington DC after the 9-11 attacks with John Howard on board Air Force 2, the Vice-President’s 747 airborne command centre.

“We were being flown to Honolulu where we were being asked a ransom to be flown back in some stranded [Qantas] jets,” he said.

It was a flight that coincided with news that Ansett Airlines had collapsed in the aftermath of its abandonment by its owner, Air New Zealand, in the most emotionally charged (but far from largest) corporate collapse in Australian history, but which had been pushed back to page three and beyond by the terrorist attacks in the US.

Moore-Wilton said John Howard was not surrounded by his usual team of advisors and had received a communication about a proposal to Cabinet to spend $750 million “propping up Ansett and rescuing it from its collapse”.

On the long flight Howard received a 10-point document as to the reasons why Ansett should be saved, and Moore-Wilton said he took a pencil to them, cutting out seven or right outright.

He said Howard came to the strong view that “it was time for the airlines to stand on their own feet and in their own right”, which meant Ansett’s hopes for a political reprieve had been snuffed out before Air Force 2 landed at Honolulu, where several Qantas 747s had been diverted on their way to Los Angeles and San Francisco when news of the 9-11 attacks lead to warnings that US air space was about to be closed and ‘locked down’.

Moore-Wilton said: “I think the decision the PM took on that flight allowed Virgin Blue the oxygen to grow and flourish.”

(At that time John Anderson, the acting Prime Minister, was actively pursuing media and political support for an Ansett rescue, only to run into the brick wall of Howard’s disapproval even before he had returned).

The Godfrey farewell was addressed by Geoff Dixon, who was Qantas CEO for eight of the 10 years during which Godfrey took Virgin Blue from two jets to a fleet of 86, and forced him to launch Jetstar as a low-cost subsidiary to counter the Virgin menace. Dixon was hamming it up

“I was convinced they wouldn’t last a year. I really wanted them to fail,” Dixon said. His successor as Qantas CEO, and the man he appointed first CEO of Jetstar, Alan Joyce, also attended the Godfrey send off. A defiant Dixon said: “In the end Virgin Blue cost us nothing. Australia ended up with two profitable and competitive airline [groups].”

Dixon and Joyce were part of a standing ovation as Godfrey was swept up by a chorus line of rocking Virgin Blue girls and boys, and looked on as their former close colleague and Qantas executive general manager John Borghetti, who succeeds Godfrey this Saturday, joined the dancers on the stage.