Steven Udvar-Hazy, founder of Air Lease Corporation, shares his journey from escaping communist Hungary to becoming an aviation entrepreneur. He discusses starting his own leasing company, the growth of Air Lease Corporation, and the impact of the 2008 financial crisis. The episode also highlights his philanthropic donation and his passion for nurturing young people's interest in aviation.
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Quick takeaways
Steven Udvar-Hazy started as an airline consultant before starting his own leasing company, Air Lease Corporation.
ILFC's acquisition by AIG resulted in better financing options and financial gains for ILFC's leadership.
After facing financial challenges with his first airline venture, Steve Hazy successfully regrouped and started AirLease Corporation, focusing on aircraft leasing.
Deep dives
Expansion in the airline industry
During the 1970s and 1980s, International Lease Finance Corporation (ILFC) experienced significant growth in the airline industry. They began by buying and leasing planes to various airlines, and eventually expanded their fleet through bulk purchases of new and used aircraft.
Acquisition by AIG
In 1990, ILFC was acquired by AIG in a stock merger worth $1.3 billion. This allowed ILFC to benefit from AIG's AAA credit rating, leading to better financing options for purchasing planes. The acquisition also resulted in ILFC's leadership becoming major shareholders of AIG, contributing to substantial financial gains.
Philanthropic donation and financial crisis
During the 2000s, Stephen Udvar-Hazy donated $60 million for the construction of an aviation museum at Dulles Airport. The financial crisis of 2008, however, took a toll on ILFC and AIG. While ILFC continued to operate, AIG faced significant challenges, impacting both companies' financial stability.
Starting Astro Air and the Dangers of Running an Airline
In the podcast episode, Steve Hazy discusses his early ventures in the airline industry. After making substantial profits as a consultant to airlines, he decided to start his own airline called Astro Air. However, running an airline proved to be a challenging and costly endeavor. Despite initial success in securing licenses and leasing an airplane, Astro Air struggled financially due to the high fixed costs and the need for consistent passenger demand. Ultimately, the airline venture resulted in significant financial losses for Hazy and the investors involved.
Retirement, Starting AirLease Corporation, and Overcoming the AIG Crisis
Following the collapse of Astro Air and the financial crisis of 2008, Steve Hazy retired from International Lease Finance Corporation (ILFC), the company he founded. However, he quickly regrouped and started a new venture, AirLease Corporation. With the support of experienced executives from ILFC, Hazy raised over $1 billion in capital to start AirLease. The company focused on aircraft leasing, a business Hazy had extensive experience in. Despite setbacks caused by the AIG financial crisis, Hazy successfully rebuilt his business and remains active in the aviation industry today.
Before Steven Udvar-Hazy was out of high school, he started working as an airline consultant. You could do that sort of thing back in the 1960’s, if you knew the industry—which indisputably, he did. Born in Communist Hungary, Steven was obsessed with aviation at an early age, memorizing plane serial numbers and schedules for fun. In his early 20’s he started his own small airline in California. But he quickly learned the big money was in aircraft leasing, so at the dawn of the jet age, he started his own leasing company. Today he runs Air Lease Corporation, which has made him a billionaire, and given him the resources to finance the dazzling extension to the Smithsonian’s Air and Space Museum in Virginia - named of course, the Steven F. Udvar-Hazy Center.
This episode was produced by Kerry Thompson, with music by Ramtin Arablouei.
Edited by Neva Grant with research help from Sam Paulson.