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government-imposed limit of 494.88 million shares by 22.62 million shares. In other words, the airline was 52 per cent foreign owned rather than the government’s prescribed limit of 49 per cent. Even so, it was not as bad as earlier figures had indicated. Pemberton reassured the Australian public: ‘Foreign ownership is starting to look manageable. A twenty-two million overhang in a company the size of Qantas, in terms of our daily turnover, is clearly manageable. And we have taken steps to ensure that, by allowing at least ninety days for the situation to work itself through.’14 He also took the opportunity to have a pop at the media for its portrayal of British Airways’ influence on the Qantas board. ‘The reality of the situation is quite the opposite to what has been portrayed publicly,’ he said, pointing out that the requirement for a two-thirds majority on decisions made it quite hard for British Airways’ three directors to swing things their way.15

Qantas had successfully gone from having one owner, the Australian government, to British Airways and about 117,000 mostly Australian shareholders, with the sale. It had floated successfully but was now exposed, without government protection, to the realities of life in the corporate world. The wolves were circling. In the gleaming offices of Macquarie Bank, Australia’s home-grown ‘millionaire factory’, heavy hitter Nicholas Moore had his eyes on Qantas. Macquarie had already come up with a debenture called Qanmac, which overcame the foreign ownership constraints of the Qantas Sales Act and allowed overseas investors to buy the Aussie airline. Moore, according to a bank insider, believed Qantas could be ‘geared up to a greater level’.16 The idea did not get past the concept stage and was never put to the board of Qantas, but the seeds were sown for the development of a later takeover bid called Project Suzie.

Sydney Morning Herald journalists Kate Askew and Scott Rochfort uncovered the details of Project Suzie in 2007 when Macquarie again took a tilt at buying Qantas. In 1998 Project Suzie was to be a leveraged buyout that would involve Macquarie, Kerry Packer – Australia’s richest man – and one of the world’s biggest private equity operators, Texas Pacific Group. It was the idea of Nicholas Moore’s young protégé, Ben Brazil, who had been recruited straight out of university and, at the age of 26, was known in the corridors of the millionaire factory as ‘Brains’. He was ambitious and persuasive enough to convince the head of the Packer family’s private company, Consolidated Press Holdings, Ashok Jacob, to take the idea to the big fella himself. Kerry Packer loved it. He told Brazil the industry needed to be shaken up and echoed former Prime Minister Bob Hawke’s view that pilots were just glorified bus drivers.

Busy Brazil managed to get David Bonderman’s Texas Pacific Group on board with a promise of a repeat of the riches it achieved when it bought bankrupt Continental Airlines five years earlier. Continental earned Texas $US600 million – just think what Qantas could chalk up, given that it wasn’t even bankrupt! Bonderman loved airlines. He had also bought 20 per cent of low-cost Irish airline Ryanair, which became Europe’s major economy airline and provided the inspiration for Jetstar in later years. Bonderman also loved Suzie.

Macquarie was keen to take the third, smaller split in addition to pocketing the fees for brokering the deal. Brazil’s idea was a basic bit of engineering – not of the planes but of the balance sheets. Qantas planes were undervalued. According to the Herald investigation, the idea was to transfer the planes off the Qantas books for refinancing through New York, freeing up the extra loot for the three new shareholders. Today we know that kind of thinking leads to global financial meltdown, but back then greed was good and it seemed like a first-rate idea. Project Suzie was a go.

Then the unthinkable happened. First, Packer senior got cold feet. According to the Herald, ‘the big fella could foresee problems in the country’s richest man buying