International Lease Finance (ILFC) CEO Steven Udvar-Hazy, who led an unsuccessful bid to buy part of the aircraft lessor's fleet from American International Group, will retire Friday.
Udvar-Hazy, who effectively invented the business of plane leasing when he founded ILFC, will retire as director and CEO, the insurer said Thursday.
John Plueger, ILFC chief operating officer since 1995, will succeed Udvar-Hazy as acting CEO, the insurer said.
Udvar-Hazy's exit comes after AIG tried for more than a year to sell ILFC as part of its efforts to repay the US government, which had to prop up the insurer with USD$182.3 billion in taxpayer-funded aid after its near-collapse.
But a sale proved to be a challenge due to the lessor's mountain of debt and funding needs. ILFC had roughly USD$30 billion of total debt financing and subordinated debt as of September 30.
Udvar-Hazy, backed by a group that included private equity firms Onex and Greenbriar Equity, emerged as leading bidders for the lessor's assets after AIG could not reach a deal to sell the whole business.
The Udvar-Hazy led group offered to buy about 10 percent of the unit's aircraft portfolio for roughly USD$4 billion. But a source said last month that their bid ended without a deal.
In December, Udvar-Hazy gave up the title of chairman to Douglas Steenland, an AIG director and former chief executive of Northwest Airlines, who became non-executive chairman of the aircraft lessor.
GODFATHER OF CIVIL AVIATION
Udvar-Hazy, born in 1946 and whose family fled the Soviet occupation of Hungary in 1958, burst into the business in 1972 when he solved a problem for Alaska Air by arranging to lease a Boeing 727 it couldn't make payments on to another airline.
He started his plane leasing business in 1973 with his college roommate and only USD$500,000 in the bank. The benefits of leasing rather than buying planes appealed to start-ups and traditional airlines alike, and he built up and sold the company to AIG in 1990 for about USD$1.3 billion.
With AIG behind him, Udvar-Hazy developed ILFC into a giant of the plane world, becoming an unofficial godfather of the civil aviation market.
Los Angeles-based ILFC, with a portfolio of more than 1,000 aircraft, became one of the biggest customers for Boeing and Airbus.
With hundreds of airlines across the world relying on his expertise, Udvar-Hazy effectively instructed the manufacturers on which planes to build. Early this decade, he was a key champion of the design which became Boeing's 787 Dreamliner.
But when the financial crisis brought AIG to its knees in September 2008, ILFC lost its access to easy funding and was put on the market by the insurer.
