Udvar-Hazy raises USD3.3 billion for new aircraft leading play


Air Lease Corporation (ALC), a new aircraft leasing company being launched by ILFC founder for former CEO, Steven Udvar-Hazy, and John Plueger, announced it has secured initial financing of USD3.3 billion, and aircraft acquisitions are already under way.

Mr Udvar-Hazy will act as Chairman and CEO of ALC and Mr Plueger will be President and COO. ALC has raised approximately USD1.3 billion of equity capital and approximately USD2 billion of committed debt financing. The company is in the process of acquiring a portfolio of aircraft and has lease commitments from a large group of diversified airlines. By spring 2011, the fleet is expected to exceed more than 100 commercial jet aircraft.

See CAPA Hot Issue on Aircraft Leasing and Finance

KfW IPEX-Bank GmbH’s Head of Aviation Financing, Michael Nosbuesch, stated the new entrants in the lessor market “have been able to raise significant amounts of equity” and with that comes capacity for further sale-and-lease back transactions in the market. Mr Nosbuesch told CAPA the demand for sale-and-lease back transactions might increase with the decrease in the portion of ECA financings, adding: “Over the medium term we expect to see a further increase in demand for operating leases and sale-and-lease back transactions as airlines are trying to realise more off balance sheet financings and increase flexibility with respect to their fleets.”

Mr Nosbuesch added: “Good airline credits should continue to have easier access to bank debt, while it can prove difficult for weaker credits. In 2010, the portion of ECA financings still remains high, but it should decline in 2011.”

See related report: KfW IPEX-Bank sees more operating leases and sale-and-lease-backs. More airport sales in Asia/LatAm

In share trading yesterday, FLY Leasing (the former B&B Air) gained 3.6%, AerCap rose 2.8% and Air Partner gained 2.0%, while Willis Lease Finance Corp and Aircastle fell 0.5% and 0.8%, respectively.

Selected Aviation Suppliers & Leasing daily share price movements (% change): 15-Jul-2010

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More