On Monday April 19, 2011 the aircraft leasing business world added another company to the ranks of the already competitive marketplace. This company is named Air Lease and it has been started by Los Angeles billionaire Steven Udvar-Hazy. The company’s IPO on Monday raised around $802.5 million by selling around 30 million shares of common stock, this was greater than their initial expectation which was around 25 million shares. The question now is whether this initial vote of confidence is because the public believes in Steven Udvar-Hazy or do they believe that the market for aircraft leasing is very strong. It is quite probable that the real answer is that it is a combination of those two factors that led to the strong IPO for Air Lease. This company will have a similar model to Udvar-Hazy’s last aircraft leasing company, International Lease Finance which he started in 1973 and sold in 1990 to AIG.
Air Lease currently has orders for 160 aircraft from Boeing and Airbus which will allow the company to start up strong with a solid base of aircraft. The aircraft which they have ordered from Boeing and Airbus consist of 150 new models and only 10 used aircraft. For those that are not familiar with how Air Lease or other aircraft leasing companies work here is a brief description. First of all they do not lease aircraft to individuals and they do not operate any type of fractional lease programs. They have a fleet of aircraft made up of all different models that they will lease out to commercial airlines when needed.
For example, if an airline has to ground a certain model of their fleet they can contract with Air Lease, who will provide the airline with aircraft on either a short term or long term basis. Another situation would be if a number of aircraft in an airline’s fleet need to undergo overhauls that will take a long time, they look to Air Lease to fill the gap for that time period when the aircraft are being overhauled.
There is certainly no doubt that Udvar-Hazy is one of the most knowledgeable businessmen in the aircraft leasing world and this will certainly give Air Lease an advantage from the start. Not only will they benefit from his wealth of knowledge, but he also has more contacts and connections in the commercial airline world than most. With the recovering economy the leasing world seems to be favoring the smaller companies as opposed to the companies that are a subsidiary of large conglomerates.
This is likely because these smaller companies are focused solely on this line of business and can be more responsive to changing trends in the aircraft leasing field. Air Lease had a good outlook prior to the IPO and now the $802.5 million in additional funding will allow them to expand their fleet even further to meet the increasing demand. The future is looking bright for Air Lease and if the economy continues to strengthen they will be in a position to benefit even further.
Sorry, the comment form is closed at this time.