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AirKarp

Steven Udvar-Hazy takes a step back

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It’s difficult to overstate Udvar-Hazy’s influence on commercial aircraft manufacturing.

When Steven Udvar-Hazy, who emigrated from Soviet-occupied Hungary to the US in 1958 with his family at the age of 12, launched International Lease Finance Corp. (ILFC) in 1973 with Leslie and Louis Gonda—by leasing a DC-8 to Aeromexico—commercial aircraft leasing didn’t exist as a business. Now, over 40% of the global airline fleet is leased.

In 2010, Udvar-Hazy left ILFC, which he continued to lead after it was bought by American International Group (AIG) in 1990, after unsuccessfully attempting to put together a group to buy the aircraft lessor back from AIG. He then quickly founded Air Lease Corp. (ALC), which went from a standing start to, as of March 31, 2016, owning 239 aircraft valued at $11.2 billion. The Los Angeles-based lessor has a customer base of 88 airlines in 50 countries.

Udvar-Hazy, 70, has announced he will step down as ALC’s CEO on July 1, but will continue as the company’s executive chairman.

It’s hard to tell exactly what that means; it’s nearly impossible to imagine Udvar-Hazy spending his days playing golf and sipping umbrella cocktails. He will likely keep a hand, and a highly influential one at that, in commercial aviation. But certainly this marks a step back from the front lines of the commercial aircraft leasing business he invented.

It’s difficult to overstate Udvar-Hazy’s influence on commercial aircraft manufacturing. When he sits on a panel at an industry conference, for example, his every utterance is carefully scrutinized; with a few words of approval or disapproval, Udvar-Hazy can basically make or break an aircraft program.

During a 2006 ISTAT conference in Orlando, he publicly declared that the Airbus A350’s design was not adequate to compete with the Boeing 787. Airbus dutifully went back to the drawing board and redesigned the aircraft; among other moves, it switched from an aluminum to a composite frame, something Udvar-Hazy had strongly suggested.

Udvar-Hazy and ALC last year settled a nasty lawsuit in which ILFC claimed Udvar-Hazy and fellow executives who launched ALC had “engaged in massive downloading and theft of ILFC’s confidential trade secret information … [and] then loaded [the information] en masse onto ALC’s servers.” ALC agreed to pay ILFC $72 million, but it emphasized the settlement was “intended solely as a compromise of disputed claims,” making clear that “no party admits any wrongdoing or liability.”

In defending against ILFC’s claims, Udvar-Hazy said that “there is no secret sauce in the aircraft leasing business.”

Indeed, Udvar-Hazy’s brain has long been the secret sauce. His ability to analyze an aircraft and determine its place—or lack thereof—in the global marketplace is unmatched. 

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