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Air Lease Corp. seeking to raise $100 million in IPO

The Century City aircraft leasing company was started last year by Los Angeles billionaire Steven Udvar-Hazy.

January 15, 2011|By W.J. Hennigan, Los Angeles Times

Air Lease Corp., the Century City aircraft leasing company started last year by Los Angeles billionaire Steven Udvar-Hazy, is seeking to raise $100 million in an initial public stock offering.

In a filing with the Securities and Exchange Commission on Friday, Udvar-Hazy's company said it intended to use the money to fund acquisition of commercial aircraft and for general corporate purposes.

The public offering could help Udvar-Hazy regain his stature as the godfather of aircraft leasing, the business of buying planes and renting them to airlines. It's a title that Udvar-Hazy lost when he stepped down as the chief executive of International Lease Finance Corp., or ILFC, the company he co-founded and grew to be the world's largest.

Udvar-Hazy, 64, founded Air Lease Corp., also known as ALC, less than two weeks after he cleaned out his desk at ILFC's posh offices on the top floors of Century City's MGM Tower. Udvar-Hazy set up his new company down the street, recruited other top executives and within weeks struck a deal with Air Berlin to lease an Airbus A320.

"He has an excellent brand in this business," said George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Va. "Now he's bringing that brand to the marketplace."

The company could fare well in a stock offering based on what Udvar-Hazy accomplished in the aircraft leasing business, Hamlin said.

Udvar-Hazy pioneered the concept of leasing passenger jets in the 1970s and turned ILFC into a global aircraft leasing empire, working with nearly every major airline. It also became the biggest customer of Boeing Co. and Airbus, the world's only remaining makers of large commercial aircraft.

He became a billionaire and one of the richest men in Los Angeles when he sold ILFC to insurance giant American International Group Inc. in 1990. AIG allowed Udvar-Hazy to continue to run the company.

In 2008, AIG received commitments of up to $182.5 billion in bailout money from the federal government after its near collapse. The federal government began overseeing AIG operations and placed limits on salaries of the company's top executives, including those at ILFC.

Udvar-Hazy abruptly left the company last February and his longtime associate, John Plueger, left a month later after briefly serving as Udvar-Hazy's replacement.

In a rare interview last summer, Udvar-Hazy said he was reenergized and was wasting no time to regain his perch atop the aircraft leasing business.

Udvar-Hazy said at the time that his goal for the new company was to own as many as 125 aircraft by spring. He said he expected ALC's fleet to grow to 350 to 500 planes within the next five years, placing the firm among the largest aircraft leasing companies but still far behind ILFC's fleet of nearly 1,000 aircraft.

ALC had acquired 40 aircraft as of Dec. 31, according to the SEC filing. It has announced deals to buy 144 new aircraft through 2017 and four more used aircraft this year. It is leasing aircraft to 25 airlines in 15 countries.

ALC did not disclose how many shares would be sold or estimate their price, nor did it say when the stock sale would take place.

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