ATW Daily News

Steven Udvar-Hazy retires from ILFC

Monday February 8, 2010

Unable to arrange a purchase of the aircraft leasing giant he founded from parent American International Group, ILFC CEO Steven Udvar-Hazy retired from the company Friday.

ILFC President and COO John Plueger, who has held those positions since 1995, will take on the role of acting CEO, AIG announced. Former Northwest Airlines President and CEO Doug Steenland joined the ILFC board last September and quietly replaced Udvar-Hazy as chairman in December, paving the way for his departure. Late last month, the Financial Times reported that AIG had decided not to divest ILFC for the time being (ATWOnline, Jan. 27).

"On behalf of AIG, I would like to thank Steve for his tireless service to ILFC. We are grateful for the work he has done to continue ILFC's leadership in the industry," AIG President and CEO Robert Benmosche said. "ILFC and AIG are confident in the long-term potential of ILFC as a leader in its marketplace. ILFC and AIG, overseen by the special committee of ILFC's Board, have worked to enhance ILFC'S long-term potential, including its funding requirements, and to manage its portfolio in the best interests of all ILFC constituencies. We anticipate selling some ILFC assets in the future, and we continue to review other options, including accessing the capital markets through secured debt financing."

Udvar-Hazy did not release a statement.

AIG acquired ILFC in 1990, 17 years after Udvar-Hazy launched the Los Angeles-based lessor. AIG's 2008 collapse shed doubt on ILFC's future in the company, and although the lessor was $685.7 million in the black through the first three quarters of 2009, it was tied to AIG by several large loans that included federal bailout money.

Last September, reports surfaced indicating that Udvar-Hazy was in talks to purchase a share of ILFC in partnership with Greenbriar Equity Group and Onex Partners, but the negotiations ended without a deal. Reuters reported last week that the consortium sought a 10% stake in ILFC for $4 billion. It said AIG's desire to sell ILFC in order to repay US government loans was hampered by the $30 billion in debt financing and subordinated debt on ILFC books as of Sept. 30.

Udvar-Hazy received ATW's 2009 Joseph S. Murphy Industry Service Award in recognition of his contributions to commercial aviation (ATW, February 2009).

by Brian Straus

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