Udvar-Hazy Gathering Investors
While a lot of people are having trouble getting financing for their businesses these days, Steven Udvar-Hazy probably isn't one of them and he's looking for up to $2 billion to start his next venture. As AVweb told you in January, Udvar-Hazy left the chairmanship of International Lease Finance Corp., the company he founded in 1973, after its parent company, AIG, lost the stellar credit rating needed to obtain the low-cost financing needed to keep that kind of business profitable. ILFC owned more than 1,000 aircraft and leased them to airlines but when AIG ran into trouble, the razor-thin margins evaporated. Udvar-Hazy wanted to buy his old company back, but AIG decided to hang on.
There are no details available on who might be jumping on board with Udvar-Hazy but at least one aviation pundit thinks he's a good bet to make them money. "He is not going to re-create ILFC overnight," Richard Aboulafia told Reuters. "But he will be doing what he likes to do -- creating a leasing business which if done right can be a fantastic enterprise." Aboulafia said all the factors that made ILFC successful (large fleet, affiliation with a blue-chip financial group) are now disadvantages. Old, inefficient aircraft are dropping in value so what were once assets become liabilities, so it's expected a new leasing company will have to offer only the latest and greatest to be successful. And since it's a buyer's market, the new venture will have some advantages. "It's a great time to buy planes," Aboulafia said.