||+1 (310) 788-1999
||+1 (310) 788-1990
Click below for data links:
ILF-2009-02 INDUSTRY SERVICE AWARD
ILF-2010-03 A380 SLIPS
ILF-2011-02-WORLD APL LEASING-A
ILF-2011-02-WORLD APL LEASING-B
ILF-2011-02-WORLD APL LEASING-C
ILF-2011-02-WORLD APL LEASING-D
ILF-2011-02-WORLD APL LEASING-E
ILF-2011-02-WORLD APL LEASING-F
ILF-2011-02-WORLD APL LEASING-G
STEVEN UDVAR-HAZY, PRESIDENT & (CEO) FOUNDED (ILFC) IN 1973 WITH 2 PARTNERS, $50,000 OF HIS OWN MONEY, & A $1.7 MILLION BANK LOAN. JET AIRPLANE LEASING COMPANY.
10250 CONSTELLATION BOULEVARD, SUITE 3400
LOS ANGELES, CALIFORNIA, CA 90067, USA
USA (United States of America) was established in 1776, it covers an area of 9,363,123 sq km, its population is 280 million, its capital city is Washington DC, and its official language is English.
SEPTEMBER 1995: SUBSIDIARY OF AMERICAN INTERNATIONAL GROUP (AIG).
767-324ER (VL754; VL755) FOR (TTA), 767-3Q8ER (VL931) FOR (EIY).
OCTOBER 1995: $2.25 BILLION, 54 ORDERS 737-600/-700/-800'S.
JANUARY 1996: 1995 = +$338.3 MILLION (+8.4%) (NET PROFIT).
MARCH 1996: $2.8 BILLION, 18/2 ORDERS 777-200B'S, & OPTIONS MAY BE CONVERTED TO 777-300'S. $3.5 BILLION, 3 ORDERS A319'S, 6 A320'S, 3 A321'S, /3 OPTIONS OF A320 SERIES, 13 A330-200'S, 1 A330-300, 12 A340-300'S & /5 OPTIONS OF ANY A330/A340 SERIES.
JULY 1996: 2ND QUARTER = +$109.7 MILLION (+$98.6 MILLION). 1ST 6 MONTHS = +$193 MILLION.
SEPTEMBER 1996: FARNBOROUGH AIR SHOW, 5 ORDERS 737'S, 5 757-200'S, 5 767-300ER'S. SINCE 1977, HAS TAKEN DELIVERY OF 393 BOEING (TBC) AIRPLANES.
JANUARY 1997: 1 ORDER A330-200 (NOW, 30 ORDERS WITH 10 DELIVERED).
MAY 1997: LARGEST JET AIRPLANE CUSTOMER IN THE WORLD THIS YEAR, WITH $5 BILLION SPENT ON NEW AIRPLANES IN LAST 3 YEARS FOR 64 DELIVERIES IN 1997, FOR 1 AIRPLANE DELIVERED EVERY 5.7 DAYS (1996 = 63).
1996 FISCAL YEAR (FY) = +$394.9 MILLION (+$338.3 MILLION) (+16.7%).
SEPTEMBER 1997: $4.5 BILLION BOEING (TBC) ORDER: 31 737-600'S, 2 747-400'S, 6 757-200/-300'S, 7 767-300ER'S, 5 767-400ER'S, 10 777-200 IGW/300'S. NOW FIRM ORDERS FOR 455 (TBC) AIRPLANES, INCLUDING 269 737'S. (ILFC) IS ONE OF THE LAUNCH CUSTOMERS FOR THE 767-400ER. ALSO ORDERED 73 757'S.
$4 BILLION AIRBUS (EDS) ORDER: 50 A319/A320/A321'S, 15 A330'S (2000). NOW FIRM ORDERS FOR 266 (EDS) AIRPLANES.
PLANS TO SELL 30 - 35 AIRPLANES PER YEAR. IN 1996, SOLD 37 = $946 MILLION.
JANUARY 1998: 1997 PRE-TAX = +$526.2 MILLION (+33.3%). NOW 370 AIRPLANES WORTH $18 BILLION. IN 1997, SOLD $1.72 BILLION WORTH OF USED AIRPLANES ($946 MILLION).
$490 MILLION TO (P&W), INCLUDING $365 MILLION FOR (PW4000) FOR 4 767'S, 3 777'S, 7 A330'S, & $125 MILLION FOR (PW2000) FOR 6 757'S.
$700 MILLION TO (GE), $500 MILLION TO (CFM), FOR 10 A319/A320/A321'S & 32 737 NG'S. ALSO, $200 MILLION FOR 28 (CF6-80C2)'S FOR 2 747-400'S, 5 767-400ER'S, & 3 767-300ER'S. (GE) HAS 100% OF ORDERS FOR 767-400ER'S.
FOR A320'S 40 WILL BE (IAE) (V2500)'S & 10 (CFM56)'S. 1ST 777-200 (IGW) (GE) 305 PAX, OF 34 ORDERS. 3 ORDERS 757-200'S.
APRIL 1998: 1ST QUARTER PRE-TAX = +$131.9 MILLION (+53.5%).
TOOK DELIVERY OF 60 BOEING (TBC)/AIRBUS (EDS) AIRPLANES IN 1997 (15% OF (TBC)/(EDS) DELIVERIES), 50 IN 1998, 51 IN 1999, & 44 IN 2000.
JULY 1998: 2 777-200ER'S, 5 YEAR LEASED, & 5 A319'S, 6 YEAR LEASED TO AIR FRANCE (AFA) FOR $520 MILLION.
SEPTEMBER 1998: AT FARNBOROUGH AIR SHOW, ANNOUNCES $1.3 BILLION ORDERS FOR BOEING (TBC): 9 737-800'S, 6 757-200'S, 1 767-300ER, & 1 777-200ER. 757/777'S IN 1999 & 737/767 IN 2001. ALSO, $1.78 BILLION FOR AIRBUS (EDS): 16 AIRPLANES, INCLUDING 6 A320'S, 8 A340-500'S (TRENT 500), AND 2 A340-600'S (TRENT 500) (2002).
25TH ANNIVERSARY! IN 1973, (ILFC)'S 1ST LEASE WAS 1 DC-8-51 TO AEROMEXICO (AMX). 25 YEARS LATER, CELEBRATES WITH DELIVERY OF 1 767-300ER TO (AMX).
PARENT COMPANY AMERICAN INTERNATIONAL GROUP (AIG), NEW YORK, PURCHASES "SUNAMERICA" FOR $18 BILLION.
NOVEMBER 1998: MEMO OF UNDERSTANDING (MOU) FOR 30 ORDERS A318'S, 100 TO 120 PAX, AS NEW LAUNCH CUSTOMER. WAS A LAUNCH CUSTOMER FOR A319. REMAINS SUBJECT TO OFFICIAL GO-AHEAD OF PROGRAM BY AIRBUS (EDS) EARLY 1999 (DECEMBER 2002). A318 IS 94 INCHES SHORTER THAN THE A319, 124 PAX.
(ILFC) COULD ALSO BE THE LAUNCH CUSTOMER FOR THE (PW6000), 16 TO 23,000 LBS THRUST, WHICH REPLACES (JT8D) ENGINES. TO TEST IN MID 1999, HAS 3 FEWER ENGINE STAGES & 500 FEWER AIRFOILS THAN (JT8D).
JANUARY 1999: OWNER, AMERICAN INTERNATIONAL GROUP MAY TAKE 8% STAKE IN CHINA AIRLINES (CHI).
FEBRUARY 1999: 1998 PRE-TAX = +$562 MILLION (+6.9%) (+$526.2 MILLION).
1 ORDER A319, 2 ORDERS A320. NOW HAS 106 A319 A320/A321'S & 49 A330/A340'S ON ORDER.
MARCH 1999: TOOK DELIVERY OF 59 AIRBUS/BOEING JETS IN 1998 & WILL TAKE 58 IN 1999 (21 WIDE BODIES), 46 IN 2000, 43 IN 2001, & 38 IN 2002. NOW HAS 420 AIRPLANES (ALL STAGE 3), AVERAGE 3.4 YEARS OLD.
JUNE 1999: PARIS AIR SHOW - 100 ORDERS 737NG'S FOR TOTAL 390 737'S OWNED BY (ILF). 60 ORDERS A318/A319/A320/A321'S INCLUDING 30 A318'S, 16 A319'S, 4 A320'S & 10 A321'S (1 A319 & 2 A320'S WERE ORDERED EARLIER) (PW6000) FOR A318 IN 10/02).
AUGUST 1999: CURRENT OPERATING FLEET OF 440 LARGE JET AIRPLANES VALUED AT >$22B FOR 125 CUSTOMERS.
SEPTEMBER 1999: SELECTS SEXTANT/SMITHS INDUSTRIES FOR FLIGHT MANAGEMENT SYSTEM (FMS) FOR 180 A318/A319/A320/A321'S & RETROFITS FOR THOSE IN SERVICE.
OCTOBER 1999: STEVEN UDVAR-HAZY, CHAIRMAN, 53, DONATES $60 MILLION TO THE SMITHSONIAN'S NATIONAL AIR & SPACE MUSEUM FOR THE BUILDING OF AN ANNEX AT WASHINGTON DULLES AIRPORT.
NOVEMBER 1999: SWITCHED 4 ORDERS 767-400ER'S TO -300ER'S.
DECEMBER 1999: 49/50 ORDERS 737-700'S & 1 737-800.
FEBRUARY 2000: 1999 PRE-TAX = +$703.4 MILLION (+$562.3 MILLION).
+1 ORDER A330 (FOR TOTAL 47, 23 DELIVERED).
APRIL 2000: DURING 1995 - 1999, SOLD 217 AIRPLANES WORTH $6 BILLION, AND PURCHASED 313 AIRPLANES FOR $16.6 BILLION, FOR FLEET OF 448 AIRPLANES, VERSUS 230 AT END OF 1995. IN 2002 - 2003, TO TAKE DELIVERIES OF 152 AIRPLANES & PLANS FLEET OF 700 AIRPLANES WITH AVERAGE AGE 3.8 YEARS. (ILFC) HAS NO 747-400'S ON ORDER. 1 ORDER (2005) A330 (TOTAL 48, 25 DELIVERED).
MAY 2000: 50 ORDERS 737NG'S FOR TOTAL 604 ORDERED BOEING AIRPLANES: 4 727'S (4); 183 737 CLASSICS (183); 15 747'S (15); 83 757'S (76); 59 767'S (47); 24 777'S (10); 6 MD-11'S (6); 16 MD-80'S (16).
40 ORDERS A320 FAMILY, 7 ORDERS A330-200'S, AND 3 ORDERS A340-600'S. TOTALS 391 AIRBUS AIRPLANES ORDERED: 16 A300/A310'S (16 DELIVERED); 260 A319/A320/A321'S (117); 85 A330/A340'S (27).
$120 MILLION TO ROLLS ROYCE (RRC) FOR (TRENT 500) ENGINES FOR 3 A340-600'S.
JUNE 2000: BECOMES 4TH INTERESTED PARTY IN A380, AFTER EMIRATES AIRLINE (EAD), SINGAPORE AIRLINES (SIA) & AIR FRANCE (AFA) WITH 5 ORDERS A380'S. 2 ORDERS (2001) A319'S FOR TOTAL 69.
JULY 2000: IN 2000, LEASING COMPANIES CONTRACTED FOR 21.4% (72 OF 336) BOEING (TBC) ORDERS, AND 33.1% (79 OF 239) AIRBUS (EDS). 7 ORDERS 737-NG'S & 33 ORDERS 777 (INCL 25 X'S) ANNOUNCED AT FARNBOROUGH AIRSHOW. LATER 62 ORDERS A320 FAMILY & 20 ORDERS A330-200'S (INCLUDING 10 A330-500'S, IF LAUNCHED).
AUGUST 2000: SELECTS (PW4168A) ENGINE FOR 8/10 ORDERS (2002-02) A330-200/-300'S. $910 MILLION CONTRACT WITH ROLLS ROYCE (RRC) FOR (TRENT) ENGINES FOR 37 FIRM & OPTION 777'S (2002), 1 A330-330 (2002) & A3XX. BRINGS TOTAL (TRENT) ENGINES IN (ILFC) FLEET TO >170.
SEPTEMBER 2000: BUYS $30 MILLION PREFERRED CONVERTIBLE STOCK OF AMTRAN (AAT).
OCTOBER 2000: 15 ORDERS (2002-02) 747-400F'S.
APRIL 2001: IN 2000, SOLD 20 AIRPLANES @ $635 MILLION (51 @ $1.8 BILLION), AND (60 @ $3.5 BILLION), & 1996 - 2000 (314 @ $16.2 BILLION). 1996 - 2000 (196 @ $5.9 BILLION). IN 2000, PURCHASED 65 AIRPLANES @ $3 BILLION.
MAY 2001: LAUNCH CUSTOMER WITH 5 ORDERS (2001-10) 747-400FLR'S FOR $1 BILLION, TO BE DELIVERED TO QANTAS AIRWAYS (QAN). AIRPLANE HAS 910,000 LBS (MTOW) (+35,000 LBS), FOR +530 NM RANGE, OR, CAN CARRY +22,000 LBS OF PAYLOAD AT (MTOW). ADDITIONAL (MTOW) ACHIEVED BY STRENGTHENING PARTS OF WING, FUSELAGE AND LANDING GEAR. ALSO 5 OPTIONS. (ILF) HAS NOW ORDERED 646 BOEING (TBC) AIRPLANES (411 DELIVERED).
JUNE 2001: HAS 508 BOEING AND AIRBUS AIRPLANES ON ORDER = 15.9% OF TOTAL AIRPLANE INDUSTRY BACKLOG. PARIS AIR SHOW $8.5 BILLION 112 ORDER AIRBUS: 80 A320; 21 A330; 1 A340-300; & 10 A380'S (5 PASSENGER AND 5 FREIGHTERS).
NOVEMBER 2001: 6 ORDERS 737NG'S FOR TOTAL 217 ORDERED, AND 52 DELIVERED.
DECEMBER 2001: SELECTS ROCKWELL COLLINS, AND PAVES AUDIO AND VIDEO DISTRIBUTION SYSTEM AS BASELINE FOR NEW 737NG'S (HAS 165 ON ORDER).
JANUARY 2002: STEVEN UDVAR-HAZY, CHAIRMAN & (CEO) REPLACES LESLIE GONDA, NOW CHAIRMAN OF EXECUTIVE COMMITTEE. JOHN PLUEGER, PRESIDENT & (COO). LESLIE GONDA, CHAIRMAN.
CANCELS ORDERS FOR 1 A319, 2 A320'S, & 1 A330, AND ADDS ORDER FOR 1 A321.
FEBRUARY 2002: CONVERTS EXISTING ORDERS FOR 10 A318'S TO 7 A319'S, AND 1 A321, LEAVING 20 A318'S ON ORDER.
APRIL 2002: 1ST QUARTER = +$173.1 MILLION (+$160.5 MILLION).
July 2002: (ILFC) makes 10-year $29.9 Million loan to Volga-Dnepr Airlines (VDA), the world's largest outsized-cargo carrier, to finance completion of an An-124-120 heavylifter manufacturing at the Ulyanovsk-based Aviastar-SP plant. The new airplane, scheduled to fly in 2003, will be (VDA)'s 10th. This loan is a noteworthy event for Russia's civil aviation sector: it is the 1st foreign commercial credit provided without Russian state guarantees and is targeted to Russian-made airplane manufacturing.
August 2002: 4 orders A319's (CFM56) (for total 123; 33 delivered); 3 orders A320's (198; 90); 3 orders A321's (96; 41); & 1 order A330 (94; 43).
September 2002: +1 order A319 (CFM56) (for total 126; 35 delivered) & 1 A320 (199, 90).
October 2002: Portfolio currently is >600 airplanes worth >$27 Billion.
January 2003: Through a court order in Paris, seizes Varig (VAR) 777-2Q8ER (28692) at (CDG) due to nonpayment of lease.
February 2003: Settles situation with Varig (VAR) and leases them back 777-2Q8ER (28692).
2002 Pre-tax = +$793.3 Million (+5.3%) (+$753.7 Million). Total assets = $27.5 Billion ($23.2 Billion). Portfolio is >600 airplanes.
Canceled 1 A320 order.
September 2003: Selects (GP7270) engines from the (GE)-Pratt & Whitney Engine Alliance for 10/10 orders A380's.
February 2004: See attached link to Leasing Survey 2004, which shows (ILFC) ranked 2nd of the top 40 airplane leasing companies with 7 regional jets, 452 narrow bodies and 212 wide bodies.
Swapped 1 order A321 for 1 order A320.
December 2004: 5-year agreement with Air Canada Technical Services (ACTS) to provide airframe, component, engine & landing gear maintenance support for (ILFC)-owned 737's, 767's, A320 family airplanes, A330's & A340's, plus (CFM56-5A/-5B) engines used on A320 family airplanes.
June 2005: At Paris Air Show, $2.9 Billion, 20 orders 737-800/-900's, 2 orders 777-200ER's, 6 orders 777-300ER's
October 2005: $2.6 Billion, 20 orders 787 Dreamliners.
November 2005: International Lease Finance Corporation (ILFC) confirmed its order for 20 787s and 4 options, worth approximately $2.7 billion, at the Dubai Air Show. (ILFC) President & (CEO), John Plueger said that (ILF) is "in discussions with 3 787 customers" to take the new airplanes, which will include both Dash 8s and Dash 9s. Deliveries will commence in January 2010.
Plueger gave Boeing (TBC) more good news when he said the 787 is "a major game changer and driving the industry because it is the most fuel efficient airplane possible." He added, "We are getting many inquiries from our customers for this airplane." He said that he is confident the initial 20 is "just the start of many more orders."
Including (ILFC)'s order, 25 customers have placed 309 orders and commitments for the 787. "To have this leading global lessor choose the 787 is a bellwether endorsement for the industry and for the passenger appeal of our newest airplane," Boeing Commercial Airplanes President & (CEO) Alan Mulally said.
Separately, (ILFC) placed an order with International Aero Engines (IAE) for (V2500)s to power up to 45 A320s, comprising 30 firm orders and 15 options. Pratt & Whitney said in a release that its share of the deal is valued at $250 million. (ILFC) already has 142 (V2500)-powered airplanes in operation and another 63 on firm order.
International Lease Finance Corporation (ILFC) signed a deal with Airbus (EDS) for 12 A350s 1one day after confirming an order for 20 787s. (ILFC) is (EDS)'s largest customer worldwide, having ordered more than >600 new Airbus airplanes since 1989, and was a launch customer for several models, including the A380. The order will include A350-800s and A350-900s and took the combined Airbus and Boeing haul in Dubai to more than $20 billion. "The A350's innovative features combined with operational commonality with existing Airbus fleets . . . [make] it an attractive asset to invest in for the future. It complements our portfolio of Airbus airplanes in which the A330 and its single-aisle family are the cornerstones," (ILFC) Chairman & (CEO) Steven Udvar-Hazy said. Airbus said it now has firm orders and commitments from 11 customers for 155 A350s.
February 2006: 2 A319-132's (2694, G-DBCG; 2697, G-DBCH), leased to bmi British Midland (BMA). A330-302 (725, B-18311), leased to China Airlines (CHI). A340-642 (736, G-VWIN "Lady Luck"), leased to Virgin Atlantic (VAA).
March 2006: Based on an "Airline Business" magazine survey of airplane leasing companies, (ILFC) has a fleet of 911 airplanes valued at $27,176 million and is ranked 2nd of the top 50 airplane leasing companies (see attached data).
(ILFC) is a subsidiary of the insurance giant American International Group (AIG). (AIG) acquired (ILFC) in 1990.
(ILF) is by far and away, the largest source of leased wide body jet airplanes.
As Boeing trumpets the early success of its 787 Dreamliner program, the pressure on Airbus to counter its rival's offering continues to grow. (ILFC) Chairman & (CEO) Steven Udvar-Hazy, whose company ordered 12 A350s in November, surprised an audience at the International Society of Transport Aircraft Trading conference in Orlando by calling on Airbus to abandon its current A350 design plans, which are based partially on the A330, and build an all-new airplane with a new fuselage and new wing that can compete with the technologically advanced 787.
"Airbus is at a crossroads," Udvar-Hazy was reported as saying, adding that a commitment to redesign the A350 and perhaps overhaul its entire midsize wide body product line would cost Airbus $8 - $10 billion and must be made by July's Farnborough Air Show. (GE) Commercial Aviation Services (GEF) President & (CEO) Henry Hubschman said he agreed with Udvar-Hazy, according to press reports.
(ILFC) and (GECAS) (GEF) are among those who have demonstrated a short-term commitment to the A350. (ILF) placed its order at the Dubai Air Show, at which time Airbus had received orders for 155 airplanes from 11 customers. "The A350's innovative features combined with operational commonality with existing Airbus fleets . . . [make] it an attractive asset to invest in for the future. It complements our portfolio of Airbus airplanes in which the A330 and its single-aisle family are the cornerstones," Udvar-Hazy said at the time.
(GEF) signed a letter of intent for 10 A350s in Paris last summer. Hubschman said the lessor placed the order because of the "significant advantages of the airplane" and added he expected "strong demand from different operators for an early slot." He noted at the time that he had some potential customers in mind and that (GEF) had "no intention to commit to the 787."
Boeing's 787 Program Head Mike Bair said that (TBC) has 30 offers out to airlines for 500 787 Dreamliners on top of the 28 customers who already have committed to 386 airplanes.
The tide seems to have changed as the 787 claims market share. Industry sources have suggested that the (GECAS) (GEF) and (ILFC) orders contain caveats requiring Airbus to meet certain order and customer milestones. Key launch customer Qatar Airways (QTA), who announced a commitment in Paris to order 60 A350 family airplanes, still has not inked the deal and some suggest that its order is conditional on Emirates Airlines (EAD) signing up as well.
Sources in London said that Udvar-Hazy's comments in Orlando may have been promoted by those within Airbus who desire an all-new airplane to combat not only the 787 Dreamliner but the 777, which eclipsed the A340 family last year. In January, Airbus (CEO) Gustav Humbert acknowledged to media, Boeing (TBC)'s efforts in the wide body segment, but cautioned that while "we are not happy with the situation, we should not panic. One year does not make a trend."
June 2006: International Lease Finance Corporation (ILF) signaled that it may cancel its order for 10 A380s and could do so without penalty because of the program's delays. Chairman and (CEO) Steven Udvar-Hazy told "Bloomberg News" that (ILF) "could cancel and are considering canceling" an order valued at $3 billion. "We are not happy and on safe ground to cancel the order," he said.
Airbus (EDS) announced further delays in the A380 program last week, saying backups in airplane wiring installations would push deliveries back 6 - 7 months. That marked the 2nd delay in the program, and Udvar-Hazy said (ILFC)'s 10 airplanes now will be delayed by 12 - 14 months. He claimed the order contract allows the leasing company to cancel without penalty if A380s are delivered >6 months late.
Airbus (EDS) spokesperson Mary Anne Greczyn said that "any particulars on penalties are confidential to individual contracts" and the manufacturer cannot comment further on specific orders. "Our customers have a right to voice concerns over the current situation, and frankly, we expect them to," she said. "Though none of our customers are speaking in a vacuum. Airbus is listening, and we are doing and will continue to do all we can to minimize the discomfort for all parties involved."
Udvar-Hazy caused a stir in March, when he publicly advocated that Airbus redesign the A350, of which (ILF) ordered 12. Airbus has said it is considering a redesign and will unveil any changes by the Farnborough Airshow, that begins July 17. The (ILFC) (CEO) told "Bloomberg" that unless Airbus is able to "fix" the design problems by the show, "we've got serious problems about taking the A350."
Airbus and parent (EADS) have been trying to temper a growing crisis since announcing the latest A380 delay last week. The French General Assembly's regular session yesterday erupted into in an angry shouting match and was suspended abruptly when Airbus's troubles were debated. The French government has a 15% stake in (EADS), whose executives, particularly co-(CEO) Noel Forgeard, have come under intense pressure to explain the delays and the timing of their public disclosure.
AeroMexico (AMX) will lease 3 787-8s from International Lease Finance Corporation, with deliveries beginning in 2010. The airplanes will replace 767s on leases set to expire and will be used on flights to Europe and Asia. (ILFC) has 20 787s on firm order.
July 2006: International Lease Finance Corporation selected the (GEnx) to power up to 24 787 Dreamliners it has ordered. (ILFC) also ordered 6 (GE90-115B)-powered 777-300ERs and 2 (GE90-94B)-powered 777-200ERs. (GE) valued all the engines, including options, at >$750 million. Delivery of the 777s is scheduled to begin this year with the 787 deliveries to begin in 2010.
International Lease Finance Corp (ILFC) signed for 6 737-800s, 2 777-300ERs and 2 787s at Farnborough. The orders take its commitment to 737s to 420, 777s to 78 and 787s to 22. At the contract signing, Chairman & (CEO) Steven Udvar-Hazy said these types "reflected the greatest airline demand."
He said that (ILFC) will "shortly announce the placement of the 787s to 3 new customers," while the 737s and 777s are topping up inventory. The lessor has not specified the model of 787 to be acquired, but Udvar-Hazy appears to be a fan of the 787-10, calling it "a clear winner."
He also indicated that ILFC is "working closely" with Boeing both on the 747-8F and on defining the passenger version. "We have been involved in all the 747 models and we launched the 747-400ERF. We are largest owner of wide body airplanes with 300 and the 747 is an integral part of the wide body fleets," he said.
(ILFC) is "holding firm" on its A380 commitment for 10 airplanes "for the moment" and is "looking at compensation [from Airbus]," Chairman and (CEO) Steven Udvar-Hazy told media, backing away from earlier statements that (ILFC) might cancel its orders over delays to the program.
(ILFC) ordered 6 additional A320 family airplanes, taking its orders for the narrow body family to > 430 and its total orders for all Airbus types to >600.
Udvar-Hazy called on Airbus to become "more European" to fast-track the correction of its problems. "When things are going right, they are European, but when they are going wrong they are French, German or British. They need to become more European," he said.
Commenting on the redesigned A350, he said Airbus has "pretty much done what we had asked, but we haven't seen guarantees or pricing." He said some potential A350 customers are moving to 787s because their needs are more time-sensitive. He also questioned whether Airbus will succeed in taking on 2 Boeing models, the 787 and 777, with a single platform: "There are challenges for [just] 1 engine and 1 wing and there are still [engine] issues for the A350-1000 as airlines want 2 engine choices."
September 2006: Pemco Aviation Group signed an agreement with (ILFC) for 1 passenger-to-freighter 737-300 conversion for delivery later this year, with options for +3 more conversions in 2007.
Singapore Airlines (SIA), Emirates (EAD), and Qantas (QAN) are bracing for further delays in the delivery of the 1st batch of A380s.
Speaking last week at an "Airways" dinner at the "Museum of Flight" in Seattle, (ILFC) Chairman Steven Udvar-Hazy told guests and media that a 3rd A380 delay is likely. According to Udvar-Hazy, the problems with the wiring required for airline customization are worse than expected and another delay may be announced soon. He said (ILF) learned of the possibility earlier that day.
It is understood that Airbus (EDS) management will meet next week to assess the full extent of the problems and how to deal with them. (EDS) announced a 7-month delay in early June, that forced the resignations of former Airbus (CEO) Gustav Humbert and (EADS) (EDS) co-(CEO) Noel Forgeard.
Last week, the highly respected head of the A380 program, Charles Champion, was replaced. His sudden departure is regarded as confirmation of further problems.
Reporting on the "Airways" event, Leeham Company consultant Scott Hamilton said Leeham sources, including one A380 customer, said that "as few as 4 A380s will be delivered next year." Those airplanes will go to (SIA). Under the current schedule, Emirates (EAD) was expecting its first A380 in September 2007 and Qantas (QAN) 2 months later. Originally, Airbus hoped to deliver 20 A380s next year. That number was slashed to 7 in June.
(SIA) was expecting its first A380 before Christmas, but a March Entry Into Service (EIS) now is considered more likely. An (SIA) spokesperson said that the airline, which announced an order for nine additional A380s at Farnborough, is "awaiting the outcome of the Airbus review."
An Emirates (EAD) spokesperson said, "We are aware of the rumors but have not engaged with Airbus, and as far as we are concerned, we are waiting to take delivery of our first A380 in October 2007."
Qantas (QAN) (CFO) Peter Gregg said that the airline has "been told by Airbus that we will get our 1st A380 in October 2007," but in a note of caution he added, "Airbus has also informed us that they are continuing to evaluate the delivery program and that this will be finalized at the end of September." EADS (EDS) co-(CEO) Louis Gallois last week confirmed that (EDS) will update the status of the A380 program publicly later this month, including the release of a revised delivery schedule.
October 2006: Emirates (EAD) President Tim Clark reinforced the push for a major revision of the A350 XWB, telling media that "Airbus (EDS) would have to go beyond the current design of the A350, if it wants to win (EAD)'s order," "Reuters" reported. Clark was addressing media at the opening of the (EAD)'s new A380 gates at London Heathrow and added, "It has to be better than the current A350 XWB."
(EAD) has decided to opt for a composite fuselage for the A350 to better match the 787, and leapfrog the 777-200ER, even though the latest revision will push the type's entry into service to at least 2014. The manufacturer unveiled the current upgrade with a cabin 12 inches wider than the A330, and new high-speed wing at the Farnborough Airshow. ILFC Chairman, Steven Udvar-Hazy was lukewarm on that concept, questioning whether Airbus could take on both the 787 and 777, with a single platform and warning that "there are challenges for [just] 1 engine and 1 wing and there are still [engine] issues for the A350-1000 as airlines want 2 engine choices." An announcement of the change to the all-composite airframe is expected early in November.
April 2007: The Engine Alliance (GP7200), which will power the A380, attained (EASA) CS-E certification, the (GE)-Aviation/Pratt & Whitney (P&W)joint venture announced. The USA (FAA) certified it in December 2005. Joint (EASA) and (FAA) airplane certification is expected by the year end. Emirates (EAD), Air France (AFA), Korean Air (KAL), and (ILFC) have selected the engine.
June 2007: (ILFC) became the largest 787 Dreamliner customer, announcing an order here for an additional 52 Dreamliners to bring its total on order to 74. The newly ordered 787s are for delivery from 2013 through 2017. The lessor also signed for 10 more 737NGs and one 777-300ER. Collective value of the buys is $8.8 billion. (ILFC) Chairman & (CEO) Steven Udvar-Hazy said the airplane is "what the world needs tomorrow" and his company will "announce new customers for the 787 in the next couple of months." He said its current orders are "only the beginning."
At the signing ceremony, Udvar-Hazy told media he is meeting with Airbus (EDS) executives about the A350 XWB, for which (ILFC) is committed to 16 of the original design, and "there is still time for Airbus (EDS) to go for composite panels on a composite frame."
This latest commitment takes total signed firm orders for the 787 Dreamliner to 634. Boeing (TBC) now has firm orders, options and proposals with potential customers for >2,000, according to 787 Program Manager Mike Bair.
July 2007: Rolls-Royce (RRC) announced that (ILFC) (ILF) chose the (Trent 1000) to power 40 of the 74 787s it has an order. The deal is worth $1.3 billion at list prices and supersedes a previous contract covering 10 airplanes, that was announced last summer. (RRC) said the order represents the largest single purchase it has received from the lessor, and that it now has orders and options for more than 500 (Trent 1000)s from 15 customers.
August 2007: (ILFC) announced the following lease contracts: Bangkok Airways (PGB) for 1 new A319-100 for 6 years with delivery in January 2009; Zoom Airlines (ZOM) for 1 used 757-200ER for 4 years and 8 months with delivery in February 2008; Air Austral (AUX) for 2 new 777-300ERs for 8 years each with delivery in February and March 2009; Kenya Airways (KEN) for 1 new 737-800 for 8 years with delivery in October 2008; Eos Airlines (EOS) for 1 used 757-200ER for 5 years with delivery in April 2009; Aerolineas Argentinas (ARG) for 1 used A340-300 for 6 years with delivery this October; Iberia (IBE) for one used A340-300 for 6 years with delivery this November.
October 2007: (ILFC) and Airbus (EDS) confirmed that the lessor has ordered 20 A350 XWBs valued at $4 billion. It provides a boost to the next-generation airplane program, particularly considering (ILFC) Chairman & (CEO) Steven Udvar-Hazy's public criticism of the initial A350 design. Airbus (EDS) said the order comprises both A350-800s and A350-900s, with an option to take A350-1000s, but did not break down how many of each the lessor will receive. Deliveries are expected in 2014 to 2017. The manufacturer said total A350 XWB orders now stand at 196. (ILFC) (ILF) had ordered 16 of the original-design A350s, and the new order replaces that one. "Timing of the revised agreement is the result of more than a year's worth of discussions," (COO) John Plueger said. He noted that the order "parallels (ILFC)'s initial order for 20 firm 787 airplanes," indicating that further buys could be forthcoming in the future. The company since has boosted the total number of 787 Dreamliners it has on order to 74, becoming the airplane's largest customer.
November 2007: Latin American airlines need to acquire 239 new airplanes above and beyond what they currently have on order between 2008 and 2012, or around 48 new airplanes per year, International Lease Finance Corp (ILF) Chairman & CEO, Steven Udvar-Hazy said at the (ALTA) Airline Leaders Forum in Cancun. Nearly two-thirds of the requirement falls in the narrow body category, with (ILFC) (ILF) estimating demand for 88 A320 family jets and 67 737NGs. But a shortage of lift is just one of the challenges they face, Udvar-Hazy made clear in a candid speech delivered to a room populated with executives from many airlines in the region. Citing the recent shutdown of BRA (BRW) in Brazil as the latest in a long string of Latin airline failures since the early 1970s, he stated, "What's amazing is that in the last 10 years, eight national flag carriers in South America went out of business." Those flying today confront increasing competition on international routes from major USA and European airlines, lack of sufficient local capital to fund investment, stifling government regulation and bureaucracy, and inadequate air traffic control and airport infrastructure, that needs a "regional solution," that includes getting the military out of the Air Traffic Control (ATC) business, he said.
Furthermore, with the exception of a handful of carriers, he identified as highly successful - - (LAN), Gol (GOT), (TAM) (TPR), Copa (COP), and (TACA) (TAC) - - most have too many airplane types and pay an interest or lease rate premium, that he put at 150 tp 250 basis points above what their counterparts in Europe and North America pay, owing to the poor credit histories of some airlines in the region. They also suffer from over-staffing and poor fleet utilization, he said. Average utilization in the region is just 7 to 8 hours per day versus 12 hours for USA Low Cost Carriers (LCC)s. For 2008, he urged leaders to "manage, manage, manage."
Rolls-Royce (RRC) confirmed an order from (ILFC) for (Trent XWB) engines to power the 20 A350 XWBs the leasing giant ordered last month. The deal is valued at $800 million at list prices and makes (ILFC) the largest Trent customer, (RRC) said, with 61 airplanes in its portfolio and 70 on order.
International Lease Finance Corp (ILF) is talking to Airbus (EDS) about a 30-ft stretch of the A380 for entry into service in 10 to 12 years, (ILFC) Chairman & (CEO) Steven Udvar-Hazy said on the sidelines of the ALTA Airline Leaders Forum in Cancun. In addition to boosting passenger capacity, the stretch would expand the space available for belly cargo on passenger flights. Cargo capacity on the A380-800 that entered service with Singapore Airlines (SIA) last month is "dismal," Hazy said, because baggage takes up so much space.
He also said that the 787-9 is around 14,000 lbs over budget on its operating empty weight. In addition to the challenge this presents for the 787-9, it creates a problem for the proposed 787-10, because the additional weight on the already heavier platform, could mean a heavier landing gear as well as higher-thrust engines, changes that would cause it to lose a lot of commonality with the smaller 787-8 and 787-9 variants, he said. He is not excited about the 747-8I Intercontinental, the passenger version of the newest iteration of the airplane. The airframe "is a great freighter," he said.
Emirates (EAD) President, Tim Clark told "Bloomberg News" that the airline would buy a stretched A380, for which (ILFC) (ILF) already is pushing. "If we had the stretch available today, probably two-thirds of the A380s we've got on order would be for that model," he told the news service, adding that (EAD) would configure the airplane to seat around 750. Airbus (EDS) (CCO) John Leahy said an A380 stretch could enter service around 2015.
December 2007: (ILFC) (ILF) announced the following airplane lease deals: Jet Airways (JPL) for 1 new 737-800 powered by (CFM56-7B24)s, delivered in December 2008 under a 10-year lease, and Jet (JPL) subsidiary, JetLite (SAQ) for 1 737-700 powered by (CFM56-7B24)s, delivered next month, under a 7-year lease; Air Canada (ACN) for 1 new 777-300ER powered by (GE90-115B)s, delivered in April 2009 under a 10-year lease; Air-Berlin (BER) for 3 new 787-8s, delivered in May 2011 under 12-year leases; Air Europa (ARE) for 2 767-300ERs, powered by (CF6-80C2B7F)s under a lease extended from early next year to spring 2013. Also, TAM (TPR) for 1 A320-200 powered by (CFM56-5B4)s, delivered next March under a 6-year lease; National Air Services (NTJ) of Saudi Arabia for 4 new A320-200s powered by (CFM56-5B4/3)s, delivered next January through April under 8-year leases; Spanair (SPP) for 1 A320-200 powered by (V2527)s, delivered next March under a 10-year lease; Belavia Belarusian Airlines (BLV) for 2 737-500s powered by (CFM56-3C-1)s, delivered next May under 5-year leases; airBaltic (BAU) for 2 757-200ERs powered by (RB211-535E4)s, delivered next spring under 8-year leases; AeroSvit Airlines (UKA) for 1 767-300ER powered by (PW4060)s, delivered in November 2008 under an 8-year lease; Centralwings (CWG) for 3 737-400s powered by (CFM56-3C1)s, delivered next spring under 5-year leases. Also, Sterling Airlines (STR) for 1 737-700 powered by (CFM56-7B24)s, delivered next February under an 8-year lease, and 1 new 737-800 powered by (CFM56-7B26)s, delivered in February 2009 under an 8-year lease; Hainan Airlines (HNA) for 3 former Cathay Pacific Airways (CAT) A340-600s powered by (Trent 556-61)s, delivered next July, October and December under 6-year leases; Chongqing Airlines (CGQ) for 3 new A319-100s powered by (V2527M-A5)s, delivered in March, April and May 2009 under 12-year leases; East Star Airlines (ESR) for 2 new A320-200s powered by (CFM56-5B4)s, delivered in March and November 2009 under 12-year leases; Brussels Airlines (DAT)/(EBA) for one 737-400 powered by (CFM56-3C1)s, delivered next February under a 5-year lease; and Emirates (EAD) for 8 777-300s powered by (Trent 892-17)s, the leases of which will be extended for 6 years to 2017, 2018 and 2019.
July 2008: Rockwell Collins reached a deal with (ILFC) to add its Digital Programmable Audio Video Entertainment System as an option included with its (PAVES) analog technology on board 737NGs. The system features a broadcast digital server with moving map hosting capabilities.
September 2008: American International Group (AIG), hit hard by the USA credit crisis, is developing a major restructuring plan that will include selling off several of its assets, possibly including (ILFC), according to the "Wall Street Journal." (AIG) is under pressure to raise significant amounts of money quickly and (ILF), which owns >900 airplanes, is valued at >$50 billion, the paper reported. While (AIG) and the USA financial sector are struggling, (ILF) posted 2nd-quarter operating income of +$352 million.
The USA government's $85 billion bailout of (ILFC)'s parent, American International Group (AIG) cast a cloud of uncertainty over the airplane lessor, that is the largest single customer of both Boeing (TBC) and Airbus (EDS). (ILF) Chairman & (CEO) Steven Udvar-Hazy reportedly is attempting to line up investors to buy back the company from (AIG), which purchased it in 1990, according to the "Wall Street Journal (WSJ)." (ILF), founded by Udvar-Hazy and Leslie and Louis Gonda in 1973, is a bright spot in troubled (AIG)'s portfolio. While the company as a whole nearly collapsed before the government stepped in this week to take an 80% stake, the airplane leasing unit posted a +$364 million net profit in the first six months of 2008 on revenue of $2.5 billion.
The (WSJ) reported that Udvar-Hazy recently concluded that it was no longer viable for (ILF) to be a part of (AIG) because the parent company's credit rating had deteriorated to the point that it was driving up the lessor's borrowing rates. He is reported to be speaking with a wide range of potential investors, including private equity firms, pension funds, banks and sovereign wealth funds.
November 2008: (ILFC) Chairman & (CEO) Steven Udvar-Hazy confirmed at the (ALTA) Airline Leaders Form in Cancun that American International Group (AIG) "is in the process of selling (ILF) to a group of investors, including management." The subject of an $85 billion USA government bailout, (AIG) was pressured to shed divisions "that were not essential to its core business strategy," Udvar-Hazy said. He offered no other details, saying only that the sale "process is underway now." (AIG) acquired (ILFC) in 1990.
(ILF) posted pre-tax income of +$913 million in the 1st 9 months of 2008, up +39% from the $657 million earned in the year-ago period. Revenue rose +9.4% year-over-year to $3.83 billion and is expected to top $5 billion for the full year, he said.
Udvar-Hazy's update of (ILF)'s ownership situation came during a speech to Latin American industry leaders in which he warned that competition both in the air and on the financing front will increase as the global slump continues. Accessing capital "is the greatest challenge we collectively face," he said, as carriers from the region will be "competing for limited financing" while paying higher interest and leasing rates than rivals from Europe, Asia, and the Middle East. "Only through profitability and performance will you overcome that handicap," he said.
The region's airlines will be under pressure to do so and will need 400 new jets - - 350 single-aisle airplanes seating 120 or more and 50 wide bodies - - valued at a combined $24 billion over the next 10 years, he said. An additional 275 used airplanes worth around $9 billion also will be needed.
Meantime, Latin American carriers will be pressured by USA and European counterparts deploying more capacity to the region as their own markets soften. "It's a classic case of airlines flying into places they shouldn't be flying into," Udvar-Hazy said. In order to handle that competition and achieve the sustained profitability that will open up financing opportunities, the region's airlines must continue to push for a "coherent system of economic regulation," improved tourism infrastructure, upgraded airport facilities and air traffic control (ATC) free of military oversight, he said. In addition, Latin American carriers would be well served to reduce the number of airplane types in their fleets, cut their work forces (he said the revenue generated per employee in the region is one-third that of carriers like Ryanair (RYR) and easyJet (EZY)) and increase investment in Information Technology (IT) and simulators.
January 2009: SEE ATTACHED - - "ILF-NEWS-2009-01."
February 2009: (ILFC) Chairman & (CEO) Steven Udvar-Hazy accepted the Joseph S Murphy Industry Service Award, named for Air Transport World (ATW)'s founder. "I want to thank my family that has supported me through all my years of commitments to the airline/aviation industry," he said.
SEE ATTACHED - - "ILF-INDUSTRY SERVICE AWARD-2009-02."
March 2009: Are the world’s two largest airplane leasing firms — (ILFC) and (GECAS) (GEF) - in trouble because of problems at their parent companies? Both, as "Dow Jones" describes, have relied heavily on the strong credit ratings of their owners (AIG) and General Electric (GE), respectively. A good rating meant they
could borrow at cheaper interest rates than most airlines, a critical advantage when buying expensive airplanes. In (AIG)’s case, it’s trying to sell (ILF) to repay government loans, but finding buyers with enough capital right now is difficult. (GE) is in better shape but may lose its (AAA) credit rating. According to "Dow Jones," leasing now accounts for half the airplane market, doubling as a percentage of the total market over the past decade.
(ILF) said in a USA Securities & Exchange Commission (SEC) filing that it needs to find secured financing to continue meeting its obligations through the spring. (ILF) is hampered by its parent company, American International Group (AIG), which was bailed out by the USA government last year and had its credit rating downgraded. (ILF)'s access to credit has been curtailed and it now needs more money from (AIG) via the USA government or funds from an outside lender. "Without additional support from (AIG) or obtaining secured financing from a third-party lender, in the future there could exist doubt concerning our ability to continue as a going concern," it said in the (SEC) filing.
April 2009: (ILFC) (ILF), which last month admitted that it needed "additional support" owing to its lack of access to financing as a unit of American International Group (AIG), reportedly is close to reaching agreement with the Federal Reserve Bank of New York (NY Fed) to obtain a $5 billion line of credit that will help facilitate its sale. The (NY Fed) and the USA government have spent >$180 billion since last fall to bail out (AIG) and keep the sprawling company solvent. (ILF) is believed to be one of (AIG)'s most valuable and profitable assets and has been attempting to find buyers to remove it from (AIG)'s umbrella. In a filing last month with the Securities and Exchange Commission, (ILF) said its viability was compromised by (AIG)'s downgraded credit status. "We have generally financed our airplane purchases through available cash balances, internally generated funds and debt financings," (ILF) explained in the filing. "A combination of the challenges facing our parent . . . the downgrades in our credit ratings or outlooks by the rating agencies, and the turmoil in the credit markets have eliminated our ability to issue commercial paper and public unsecured debt." It said it needed additional funding going forward "to meet our future liquidity needs."
According to multiple reports, the (NY Fed) line of credit (to be funneled through (AIG)) is aimed at assuaging concerns of potential buyers that (ILF) can't meet near-term financing needs given the large number of airplanes it has on order. As of the end of last year, it had firm orders with Boeing (TBC) and Airbus (EDS) for 168 airplanes with a combined value of $16.7 billion to be delivered through 2019.
The "Financial Times" reported yesterday that (ILF) is in "advanced discussions" with potential buyers including the Carlyle Group, Thomas H Lee Partners and the Greenbriar Equity Group. (AIG) has said that there is "considerable market interest" in (ILF) and insisted it will be able to keep the lessor afloat via its bailout funds until a buyer or buyers can be found.
June 2009: (ILFC) (ILF) Chairman & (CEO) Steven Udvar-Hazy reportedly has threatened to cancel or reduce the lessor's order for 10 A380s. Speaking to the German weekly "Wirtschaftswoche," he said, "We are asking ourselves if we are really going to take delivery of the 10 planes . . . We can cancel our order without penalty between January and June 2010, but we might also postpone deliveries or replace the A380 with another plane." He made a similar statement to Munich's "Suddeutsche Zeitung," which quoted him as saying that the lessor could cancel without penalty between January and June 2010.
"I see a general structural change in the industry and in the way that airlines think about the A380," Udvar-Hazy told the newspaper, while Wirtschaftswoche quoted him as saying that there has been "an important change in attitude by airlines regarding the A380" and that "interest is weaker than expected, in particular among the Chinese." He added, "If I were Airbus (EDS), I would be very worried. At current production rhythms, it will be very hard to make money with this plane."
August 2009: The American International Group (IAG)'s sale of its massive International Lease Finance Corporation (ILF)'s airplane leasing business is unlikely to happen anytime soon, according to Wells Fargo research, which notes that offer prices are reportedly in the $2.5 - $3 billion range, but for (AIG) - - which is under pressure to raise cash to repay USA Treasury bailout funds - - "it may be prudent to wait for a market recovery," while buyers may do better focusing on smaller, lower-risk lessors.
In its second quarter to the end of June, (ILF)'s operating income fell -5% year-on-year to $335 million. It cited lower flight equipment marketing activity and higher depreciation expense, partially offset by a +3.2% increase in rental revenue, to just under $1.3 billion, as its airplane fleet grew to 992 units, +45 more than during the second quarter of 2008.
September 2009: International Lease Finance Corporation (ILF) Chairman, Steven Udvar-Hazy said it is "premature to comment" on reports that he is preparing to leave the company he co-founded and later sold to American International Group (AIG) in order to start a new leasing venture that may bid on some of (ILF)'s assets. The "Wall Street Journal" reported this week that Udvar-Hazy was in talks to buy part of (ILF) and that a consortium consisting of Greenbriar Equity Group and Onex Partners was bidding on the company. Udvar-Hazy would not identify any potential partners but acknowledged, "We have been approached by dozens of large investors to start a new leasing company." He added that the (AIG) board is meeting on September 15 to review strategic alternatives.
October 2009: (ILFC) (ILF) received a $2 billion loan from parent American International Group (AIG) to pay off debt due this month, according to a filing with the USA Securities & Exchange Commission cited in numerous press reports, further tying the lessor to the now majority government-owned insurance conglomerate. (AIG) already had pumped $1.7 billion of government money into (ILF) in the spring. (ILF) reportedly put up airplanes as collateral for the loans.
November 2009: (ILFC) reported a 3rd-quarter profit of +$245.8 million, up +9.4% year-over-year, on a +3.7% lift in revenue to $1.35 billion. 9-month profit climbed +16.6% to +$685.7 million. As of September 30, (ILF) owned 991 airplanes, with +11 more classified as finance and sales-type leases, while providing fleet management services on another 99. (ILF) has 125 new airplanes scheduled for delivery through 2019, including 5 in the 2009 4th quarter. "Given the current market conditions and that we currently do not have access to unsecured debt markets, new airplane purchases may be limited for the foreseeable future," it said in a filing with the USA Securities & Exchange Commission.
January 2010: Former Northwest Airlines (NWA) President & (CEO) Doug Steenland has replaced founder & (CEO) Steven Udvar-Hazy as Chairman of (ILFC), according to the lessor's website, while "The Wall Street Journal" cited sources who indicated that Udvar-Hazy could leave the company. The newspaper said Steenland joined (ILF) last month. (ILF) reported a +$245.8 million 3rd-quarter profit and received a $2 billion loan from parent American International Group (AIG), which has been trying to sell it, in October.
The (AIG) has decided not to divest (ILFC) (ILF) after deciding the profit from the sale would be insufficient, sources told the "Financial Times." The paper said that "Standard & Poor's" has cut (ILF)'s credit rating to the lowest investment-grade level. Sources told the (FT) that Founder & (CEO) Steven Udvar-Hazy has not decided whether to leave (ILF).
(ILFC) closed out 2009 with the following lease deals and deliveries: One used A320-200 to WindJet (WJT) for 5 years; 1 used 737-500 to Georgian Airways (GEI) for 3 years; 1 used 757-200ER to Spanish charter airline Privilege Style (PVG) for 5 years (scheduled for February delivery); 1 used 737-300 to Wings of Lebanon (WOL) for 3 years; 2 used A321-200s to Air Berlin (BER) for 5 years each; 1 used A321-200 and 1 used A320-200 to Turkuaz Airlines (TKZ) of Istanbul for 5 years each; 1 used 737-400 to Vision Airlines (VIS) of Las Vegas for 5 years; 1 used A310-300 to Biman Bangladesh Airlines (BNG) for 3 years; 3 used 737-300s to Kuban Airlines (KIL) of Russia for 3 years each (scheduled for delivery in February and March); 2 used A321-100s to Atlasjet (ABE) for 4 years each; 1 used A330-200 to Batavia Air (BTV) for 6 years; 1 used 767-300ER to Kenya Airways (KEN) for 18 months.
February 2010: Unable to arrange a purchase of the airplane leasing giant he founded from parent, the American International Group (AIG), (ILFC) (ILF) (CEO) Steven Udvar-Hazy retired from the company.
(ILF) President & (COO) John Plueger, who has held those positions since 1995, will take on the role of acting (CEO), (AIG) announced. Former Northwest Airlines (NWA) President & (CEO), Doug Steenland joined the (ILF) board last September and quietly replaced Udvar-Hazy as Chairman in December, paving the way for his departure. Late last month, the "Financial Times" reported that (AIG) had decided not to divest (ILF) for the time being.
"On behalf of (AIG), I would like to thank Steve for his tireless service to (ILF). We are grateful for the work he has done to continue (ILF)'s leadership in the industry," (AIG) President & (CEO) Robert Benmosche said. "(ILF) and (AIG) are confident in the long-term potential of (ILF) as a leader in its marketplace. (ILF) and (AIG), overseen by the special committee of (ILF)'s Board, have worked to enhance (ILF)'S long-term potential, including its funding requirements, and to manage its portfolio in the best interests of all (ILF) constituencies. We anticipate selling some (ILF) assets in the future, and we continue to review other options, including accessing the capital markets through secured debt financing."
(AIG) acquired (ILF) in 1990, 17 years after Udvar-Hazy launched the Los Angeles-based lessor. (AIG)'s 2008 collapse shed doubt on (ILF)'s future in the company, and although the lessor was -$685.7 million in the black through the 1st 3 quarters of 2009, it was tied to (AIG) by several large loans that included federal bailout money.
Last September, reports surfaced indicating that Udvar-Hazy was in talks to purchase a share of (ILF) in partnership with Greenbriar Equity Group and Onex Partners, but the negotiations ended without a deal. "Reuters" reported that the consortium sought a 10% stake in (ILF) for $4 billion. It said (AIG)'s desire to sell (ILF) in order to repay USA government loans was hampered by the $30 billion in debt financing and subordinated debt on (ILF) books as of September 30.
Udvar-Hazy received Air Transport World (ATW)'s 2009 Joseph S Murphy Industry Service Award in recognition of his contributions to commercial aviation.
April 2010: (ILFC) President & (COO) & Acting (CEO), John Plueger retired from the company. He took on the (CEO) role 2 months ago when founder Steven Udvar-Hazy departed. Vice Chairman & (CFO), Alan Lund was named interim President & (CEO), and (ILF) said it "will conduct a search for a permanent successor." Senior VP Finance, Fred Cromer will be (CFO).
ILFC (ILF) announced it will sell a portfolio of 53 airplanes with a book value of $2.3 billion to Macquarie Aerospace for $1.99 billion. Completion of the sale is slated to occur over the remainder of the year, subject to closing conditions. The sale will raise the average age of (ILFC)'s fleet of approximately 1,000 jet airplanes from 7.4 years to 7.6 years, it said. According to Standard & Poor (S&P)'s, "This is the first sale of a large airplane portfolio since the global financial and economic crisis began in late 2008. The approximately -14% discount to book value is consistent with our expectations." (S&P) said the airplanes are on lease to 35 airlines and the average airplane age is <4 years, "much younger than (ILFC) (ILF)'s remaining fleet."
May 2010: The American International Group (AIG) named former Airbus (EDS) North America President & (CEO) Henri Courpron to the post of President & (CEO) of subsidiary (ILFC) (ILF).
He succeeds (ILF) Vice Chairman, Alan Lund, who has served as President & (CEO) since March. Steven Udvar-Hazy retired from the post in February after he was unable to arrange a purchase of the airplane leasing giant he founded. Courpron will be based in (ILF)'s Los Angeles headquarters.
(AIG) President & (CEO) Robert Benmosche said, "Having stabilized the company's financial position, (ILF) is now ready to begin growing its fleet. As is well known, (ILF) has raised more than >$8 billion in liquidity from new debt, bank debt maturity extensions and airplane sales."
(ILF) Chairman, Doug Steenland added, "Henri is well known in the aviation industry for his customer focus and (ILF) and its customers will benefit from that as we remain committed to (ILF)'s position as a strong, enduring franchise."
Courpron left Airbus (EDS) North America in 2007 to become (EDS) Executive VP Procurement. He later became President of the Seabury Group, an advisory and investment banking firm in aviation and aerospace, based in New York and Toulouse.
August 2010: (ILFC) (ILF) had a another good quarter, earning $111 million from April to June. Net margin was 9%. More problematic is the bankruptcy of Mexicana (CMA), which operates 12 of its planes. It also warned that lower lease rates and increased costs associated with repossessing and redeploying airplanes will continue through 2010 and 2011.
(ILFC) (ILF) has struggled earlier this year to pay off its loans, and had to draw $3.9 billion from (AIG) to pay back some of its debt. (AIG) had tried to find a buyer for the unit, but any sale seems off the table for now as (ILFC) has found healthy demand for recent bond offerings which will help it meet some deadlines for paying back loans.
The repayment will release about $10 billion of collateral that (ILFC) had pledged to the Fed under the credit agreement. With the recent debt sales and other notes issues, the airplane lease unit has boosted its total liquidity (assets that can quickly be converted to cash) to >$12.5 billion over the last 5 months.
The offerings "are a direct reflection of (ILFC)'s viability and future prospects as a leader in leasing airplanes to the world's airlines," said Henri Courpron, (ILFC)'s (CEO). He noted that (ILF) has >$13 billion in airplane orders.
(ILF) said it completed the sale of $4.4 billion in secured and unsecured notes and "used the bulk of the proceeds to repay in full $3.9 billion in loans extended to (ILFC)" by the Federal Reserve Bank of New York as part of the USA government/NY Fed bailout of (ILFC) parent, American International Group (AIG) in 2008 and 2009. "The repayment strengthens (ILFC)’s financial position by releasing approximately $10 billion of collateral previously pledged to the [NY Fed]," (ILFC) said.
It continued, "The new debt is divided into four smaller maturities with payments that are now due in later years, enhancing (ILFC)’s flexibility as it moves forward. These notes issuances, along with previous debt issuances, airplane sales and extensions of debt maturities, bring the total liquidity raised by (ILFC) in the last 5 months to more than >$12.5 billion." (CEO) Henri Courpron said the note offerings, "which were increased from $2.5 to $4.4 billion, are a direct reflection of (ILFC)’s viability and future prospects as a leader in leasing airplanes to the world’s airlines."
September 2010: International Lease Finance Corporation (ILFC) named David Nixon, Senior VP Transactions, an appointment (ILFC) says will “enhance the way (ILFC) evaluates and implements business transactions with a view to improve (ILFC)’s competitiveness and financial performance position.” Nixon, who previously was VP Contracts at Airbus (EDS) China, has more than >25 years' experience and has worked for Boeing (TBC) and Fairchild Dornier. He will report to Chief Marketing Officer, Philip Scruggs. "Bringing on board an industry veteran like David allows us to continue to separate ourselves from our competitors in real and substantial ways,” says Scruggs.
January 2011: International Lease Finance Corporation (ILFC) (ILF) in the 4th quarter 2010 entered into 56 airplane leases, bringing the year's total to 259 lease commitments. (ILF) placed 29 Airbus (EDS) airplanes (15 A319s, 6 A320s, 4 A321s, 3 A330s, and 1 A340) and 35 Boeing (TBC) airplanes (25 737s, 2 757s, 1 767, 1 777, and 6 787s) with 26 customers in 18 countries during the quarter. "We had a very active 4th quarter, which has provided (ILFC) a strong run rate as we move forward in 2011," (CEO) Henri Courpron said. "What I believe is very impressive is the geographic diversity represented by our customers. (ILFC)’s proven ability to place airplanes with airline operators around the world is further evidence of our abilities to offer an attractive range of airplanes and services."
February 2011: SEE ATTACHED "AIRLINE BUSINESS" MAGAZINE ARTICLE ON WORLD AIRPLANE LEASING, WHICH SHOWS INTERNATIONAL LEASE FINANCE COMPANY (ILFC) (ILF) AS #2 - - "ILF-2011-02-WORLD APL LEASING-A/B/C/D/E/F."
International Lease Finance Corporation (ILF) announced it will open a regional office in Amsterdam this summer, which will be managed by Senior VP, Head of (ILFC) Europe, Middle East & Africa, Colin Bole.
March 2011: International Lease Finance Corporation (ILFC) announced a commitment for a $1.3 billion secured term loan with a group of 15 banks from Europe, Asia and North America. (ILF) said it also has the right to "upsize the transaction" by $200 million in commitments from other lenders.
(ILFC) announced the promotion of (CFO) Fred Cromer to the additional position of President, succeeding Alan Lund, who retired as President but will continue in his role as Vice Chairman and a member of the company’s board of directors. Philip Scruggs was appointed Executive VP. Cromer joined (ILFC) in 2008 and was named (CFO) in 2010. Scruggs is a 17-year veteran of (ILFC). Lund joined the company in 1982; he will serve as a special advisor to the senior executive team through June.
The new funding facility was arranged by Citi and Credit Suisse as Joint Structuring and Placement Agents, along with (BNP) Paribas as an additional Joint Placement Agent. It will be funded over the next 12 months and matures in 2018. Proceeds will be used "primarily to prepay existing unsecured and secured bank facilities that would otherwise mature in October 2011 and 2012," (ILFC) said.
(ILFC) (ILF) finalized a firm order for 33 Next-Generation 737-800s. The order, with a list-price value of more than >$2.6 billion, is part of (ILF)’s initiative to modernize its fleet and increase the balance in its airplane portfolio. “This 737 order will provide (ILFC)’s airline customers with advanced, highly competitive airplanes that deliver the best reliability, superior operating economics and increased passenger comfort,” said Marlin Dailey, VP Sales & Marketing for Boeing Commercial Airplanes (TBC). “These airplanes deliver the continuous improvements we are making to the Next-Generation 737. ”
Today’s operators fly 737s that are +5% more fuel efficient than the first Next-Generation 737s delivered in 1998 and additional improvements are on the way. Boeing’s performance improvement package, now in certification, will boost fuel efficiency a further +2% through aerodynamic and engine changes. The performance improvements to the airframe and engine are expected to be in service between mid-2011 and early 2012.
Additionally, (TBC) will deliver (ILFC)’s new Next-Generation 737-800s with the all-new 737 Boeing "Sky Interior." The new interior introduces cove lighting and curving architecture that create a distinctive entryway. Passengers will enjoy a more open cabin and a soft blue sky overhead simulated by light-emitting diode (LED) lighting. The new interior also features modern, sculpted sidewalls and window reveals to draw passengers’ eyes to the view outside the window, as well as larger stowage bins allowing passengers the ability to store their luggage closer to their seats.
(ILFC) has signed a Memorandum of Understanding (MOU) for 100 A320neo Family airplanes, comprising 75 A320neo and 25 A321neo types. (ILFC) becomes the first customer for the A321neo, the largest member of the A320neo Family. In a separate agreement, Pratt & Whitney (P&W) has been selected by (ILFC) to power at least 60 A320neo Family airplanes.
The A320neo incorporates new more efficient engines and large wing tip devices called “Sharklets” which together deliver up to -15% in fuel savings. This represents some -3,600 tonnes less CO2 per airplane, per year. In addition, the A320neo provides a double-digit reduction in NOx emissions and reduced engine noise.
In parallel with this order for the A320neo, (ILFC) will terminate its purchase agreement for ten A380s. “With 104 wide bodies on order and fewer than a dozen single aisles, it makes perfect sense to re-balance our order book and position (ILFC) strategically on the fuel-efficient neo,” said Henri Courpron, (ILFC) (CEO).
“We are delighted to welcome (ILFC) as the first lessor to order the A320neo,” said John Leahy, Airbus Chief Operating Officer, Customers.
April 2011: (ILFC) (ILF) reached a 5-year lease agreement with Aerolíneas Argentinas (ARG) for 10 737-700NG airplanes. Deliveries are expected to begin this month and be completed by October 2012.
May 2011: International Lease Finance Corporation (ILF) appointed Elias Habayeb, as (CFO). He formerly was Senior VP Investments & Financial Services for (ILF) parent, (AIG).
June 2011: International Lease Finance Corporation (ILF) said it has entered into 114 airplane lease commitments so far this year, noting that it is "expanding" its global customer base and that airlines are "acknowledging" its "financial strength," as well as the "appeal" of its portfolio and order book.
August 2011: International Lease Finance Corporation (ILF) has agreed to acquire AerCap Holdings (DEA) subsidiary, AeroTurbine (AUB) for $228 million. (ILFC) said the acquisition will “provide synergies and allow (ILFC) to realize more value from its fleet portfolio,” as well as “maximize the value in the remaining life and ultimate disposition of airplanes and provide a tool to optimize future airplane portfolio and operational acquisitions.” Closing is expected in the coming months.
Miami-based AeroTurbine (AUB), acquired by AerCap (DEA) in 2006, focuses on engine leasing and trading, airframe and engine disassembly, aviation supply chain solutions, part sales and Maintenance Repair & Overhaul (MRO) services and offers access to a large pool of certified airplane engines, parts, and supply chain solutions.
Previous to the acquisition, (ILFC) sought to sell airplanes on lease prior to their end-of-life phase, pursing part-out options on “only a small number of airplanes.” Now the acquisition “offers a new compelling strategic solution to maximize value across the complete life cycle of an airplane,” said (ILFC) (CEO) Henri Courpron.
September 2011: (ILFC) has agreed to purchase and lease back 5 new 737-800s to Virgin Australia (VOZ), scheduled to be delivered in 2012 and 2013.
November 2011: International Lease Finance Corporation (ILFC) entered into a sale-leaseback arrangement with American Airlines (AAL) to finance 15 previously ordered 737-800 NextGen airplanes. Two airplanes have been delivered; the rest are scheduled for delivery in 2012.
January 2012: With an eye toward the Asia/Pacific region's growing importance for the commercial airplane leasing business, International Lease Finance Corporation (ILFC) said it will establish offices in Beijing and Singapore this year. It also named Head of Transactions, David Nixon to the newly created post of Senior VP & Head of Asia/Pacific.
"Over a third of (ILFC)'s annual lease revenue is generated in the Asia/Pacific region," the lessor stated. (CEO), Henri Courpron said that (ILFC) is "positioning ourselves to be closer and more responsive to our airline customers. We seek to expand our presence in the Asia/Pacific region, which will continue to grow in significance."
(ILFC) completed 296 lease transactions in 2011, +37 more than in 2010. (ILF) said it now has >180 customers in >80 countries.
April 2012: International Lease Finance Corporation (ILFC) (ILF) and its parent, the American International Group (AIG) have filed a civil lawsuit in a Los Angeles court against Air Lease Corporation (ALE) and its Chairman & (CEO), Steven Udvar-Hazy, as well as a number of other top (ALE) executives, seeking damages that it said may reach “several hundreds of millions” of dollars “or more.”
(ILFC) said in the court filing that Udvar-Hazy, the Founder & (CEO) of the airplane lessor until his 2010 departure to launch (ALE), stole “confidential trade secret information” and used it to quickly establish (ALE) as an (ILFC) rival.
(ILFC) claimed in the lawsuit, “Before resigning their employment, [Udvar-Hazy and fellow] former (ILFC) executives engaged in massive downloading and theft of (ILFC)’s confidential trade secret information (several thousand electronic files). These files were then loaded en masse onto (ALE)’s servers. Forensic analysis shows further that many of these files became the blueprint for customer communications, contracts, pricing, marketing and other strategies upon which (ALE) built its business.”
(ALE) rejected the lawsuit as “baseless,” saying “Unable to compete effectively and perceiving (ALE) as a growing threat, (AIG)/(ILFC) has now resorted to a baseless trade secrets lawsuit that (ALE) will vigorously contest and defeat.”
(ALE) has a portfolio of more than >100 airplanes, launched an Initial Public Offering (IPO) in 2011 and Udvar-Hazy continues to have huge influence on commercial airplane manufacturers. (ILFC), however, said this success is owing to its claim that Udvar-Hazy “unlawfully stole this business from (ILFC).”
(ILFC) said, “We regret having to file this suit, but the defendants’ misconduct left us no choice but to go to court to protect our rights and the rights of our shareholders, including our largest shareholder, the American taxpayer.” The Federal Reserve Bank of New York and the USA government spent more than >$180 billion bailing out an insolvent (AIG) in 2008 and 2009, and the USA government is still its largest shareholder.
Before departing (ILFC), Udvar-Hazy attempted to put together a group to buy the lessor from (AIG), but ultimately decided parting ways was the best option. (AIG) acquired (ILFC) in 1990, 17 years after Udvar-Hazy launched the Los Angeles-based company.
May 2012: International Lease Finance Corporation (ILFC) has completed 65 lease transactions and took delivery of 10 new 737-800s during the first quarter. The transactions include extensions and placements from (ILFC)’s existing fleet for nearly 200 customers in >80 countries.
July 2012: Dublin Aerospace (DAS) said it has concluded re-delivery checks on 8 A320s on behalf of the International Lease Finance Corporation (ILFC) (ILF). Work included structural inspections, cabin re-configurations, engine changes, and landing gear changes.
July 2012: The International Lease Finance Corporation (ILFC) (ILF) and Emirates Airline (EAD) have signed a sale and leaseback agreement for 4 new 777-300ER airplanes. Deliveries are scheduled to begin this month and will be completed by January 2013.
“The (ILFC) already leases to (EAD) a significant number of 777 airplanes, a proven and valuable airplane in its fleet. It is important for us to build on our relationship with Emirates (EAD),” said Colin Bole, (ILFC) Head of Europe, Middle East & Africa.
November 2012: 3rd quarter = +$18 million.
The (ILFC) (ILF) has 901 airplanes leased to 177 airlines, mostly outside the USA. The (ILF) has orders for 38 737-800s, 1 777-300ER, 74 787s, 100 A320neos, and 20 A350s.
December 2012: The American International Group (AIG) has entered into “a definitive agreement” to sell 80.1% of International Lease Finance Corporation (ILFC) to a consortium of Chinese investors for $4.23 billion in cash. Under the agreement, detailed in a USA Securities & Exchange Commission (SEC) filing, the consortium led by New China Trust Company Chairman, Weng Xianding will also have an option to buy another 9.9% for $522.5 million. The total deal, subject to approval of regulatory authorities in both the USA and China, values (ILFC) at $5.28 billion. (ILFC), originally founded by Steven Udvar-Hazy in Los Angeles in 1973, has a portfolio of 1,000 owned or managed airplanes and commitments to purchase another 233.
The investor group is comprised of New China Trust Company, China Aviation Industrial Fund and P3 Investments. According to the (AIG), the group “is expected to be expanded” to include New China Life Insurance Company and an investment arm of the Industrial & Commercial Bank of China International.
“This transaction creates a solid and strategic partnership for (ILFC),” (AIG) President & (CEO), Robert Benmosche said. “While (ILFC) is an extremely strong business platform and the (AIG) will retain a minority stake as a passive investor, the airplane leasing business is not core to our insurance operations. Upon completion, the transaction will have a positive impact on (AIG)’s liquidity and credit profile and will enable us to continue to focus on our core insurance businesses.”
In the (SEC) filing, the (AIG) said the agreement includes a clause allowing for termination of the transaction on May 15, 2013, if it has not been finalized. The termination date could be extended to June 17, 2013.
The (AIG) reiterated that (ILFC) is “a non-core asset” it has been looking to sell for some time. The Federal Reserve Bank of New York and the USA government spent >$180 billion bailing out an insolvent (AIG) in 2008 and 2009, and the USA government is still its largest shareholder.
(ILFC) Founder, Steven Udvar-Hazy attempted to put together a group to buy the lessor from the (AIG) around that time, but ultimately left in 2010 to launch the Air Lease Corporation (ALE). The (AIG) acquired the (ILFC) in 1990, 17 years after Udvar-Hazy started the Los Angeles-based company.
March 2013: The International Lease Finance Corporation (ILFC) (ILF) has removed its A321 airplanes from India following a ruling from India’s High Court. (ILFC) said it has successfully withdrawn an initial airplane after a March 15 ruling, which it described as “first step in the right direction.” It did not specify the airplane operator.
“This decision is a much anticipated development in (ILFC)’s efforts to recover our airplanes and engines,” (ILFC) (CEO), Henri Courpron said. “We commend India’s High Court for taking a firm stance which we hope will prompt the publication of the much awaited policy revision. It is not too late for India to reverse the current negative perception prevailing within the international finance forum.” Courpron said India is seen as a “hostile” environment for foreign investors. He called for comprehensive policy change, making it easier to remove airplanes from the country without any restrictions.
India ratified the Cape Town Treaty in 2008. This agreement is meant to offer safeguards to mobile asset owners, making it easier to repossess their airplanes, and reduce exposure-related premiums for airline operators.
April 2013: International Lease Finance Corporation (ILF) reported 60 lease transactions in the 1st quarter. The American International Group (AIG) subsidiary has commitments to purchase 244 new airplanes. It said it is the largest customer for the 787 and the largest lessor customer of the A320neo family with 50 on order.
The 60 transactions include extensions, new leases of used airplanes and placements of new airplanes from (ILFC)’s portfolio. (ILF) owns and manages approximately 1,000 airplanes with 200 airlines in >80 countries.
June 2013: International Lease Finance Corporation (ILFC) subsidiary, AeroTurbine (AUB) has signed a consignment material stock agreement with Engineering Holding, which does Maintenance and supplies parts for western airplanes in Russia and is the parent of (S7) (SBR) Engineering and Sibir Technics.
July 2013: International Lease Finance Corporation (ILFC) (ILF) has completed 125 lease transactions during the first half. These transactions include extensions, new leases of used airplanes as well as placements of new airplanes from (ILFC) for approximately 200 customers across more than >80 countries.
At the Paris Air Show, (ILFC) exercised options for an additional +50 A320neo family airplanes, bringing its total A320neo orders to 150. (ILFC) also became the lessor launch customer for the Embraer EMB-Jets E2 family, signing a letter of intent (LOI) for the purchase of up to 100 E-Jets. In late June, (ILFC) took delivery of its Boeing 787 for Norwegian Air Shuttle (NWG). (ILFC) is the single largest customer for the 787 Dreamliner with 74 on order.
Later, (ILF) finalized its order with Embraer (EMB) for 50 E-Jets E2 airplanes, comprising 25 E190-E2s and 25 E195-E2s. The firm order has an estimated value of $2.85 billion at current list prices.
The contract, announced as a letter of intent (LOI) at the Paris Air Show in June, also contains options for an additional 25 E190-E2s and 25 E195-E2s, bringing the potential order up to 100 airplanes. Deliveries are expected to begin in 2018 and complete in 2023.
All of the E2 models will be powered by new Pratt & Whitney (PRW) geared turbofan (GTF) engines and have new wings. “This order for the E-Jets E2 airplanes is in line with our current fleet strategy, which aims to provide our customers with a diverse mix of airplanes for their market-specific needs,” (ILFC) (CEO), Henri Courpron said. “We will also leverage access to the existing operators of the current version of Embraer (EMB) to offer them the new E2.”
(ILF) has delivered a new 737-800 to Tianjin-based, Okay Airways (OKA), which will be used to expand services to meet the growing demand within its flight route network. The airplane is powered by two (CFM56-7B26E) engines and will operate on (OKA)’s routes linking Tianjin with other major cities in China.
October 2013: International Lease Finance Corporation (ILF) appointed Peter Chang as Senior VP & Head of Greater China. Chang will be responsible for leading the company’s marketing efforts and operations throughout the Greater China region.
(ILFC) has signed a 12-year lease agreement with SriLankan Airlines (LNK) for three A350-900s. The airplanes will support (LNK)’s long-haul fleet renewal.
SriLankan (LNK) (CEO), Kapila Chandrasena said, “This would be the first time the A350 family airplanes will enter our fleet, and it marks a significant step toward the growth of the airline.”
(LNK) signed a memorandum of understanding (MOU) for 6 Airbus A330-300s and 4 A350-900s at the Paris Air Show in June. It is working to prepare for its Oneworld (ONW) Alliance membership early next year.
The A350-900s are powered by Rolls-Royce (RRC) (Trent XWB-84) and are part of an operating lease agreement, which has an anticipated delivery timeline between July and September 2016. (ILFC) has two A330-200s and one A340-300 on lease with SriLankan (LNK).
Former Aircastle (CSL) and Aviation Capital Group (CGP) executive, Peter Chang has been named Senior VP & Head Greater China for (ILFC).
December 2013: The American International Group (AIG) has agreed to sell its airplane-leasing unit, International Lease Finance Corporation (ILFC) to Netherlands-based, AerCap (DEA) for $3 billion, the group said on December 16.
The transaction is subject to regulatory approval and the consent of AerCap (DEA)'s shareholders, however, the (AIG) expects to close the transaction by the second quarter of 2014. According to (DEA), the newly combined company would have a fleet of over >1,300 airplanes consisting of A320, A330 and 737NG plus 777 family airplanes.
(DEA) will also take over the (AIG)'s current order book, which includes $25 billion in-future deliveries.
The (AIG) had attempted to sell its airplane leasing business to a group of Chinese investors last year but the deal fell through when the group was unable to produce the necessary financing for the purchase.
Robert Benmosche, (CEO) of the (AIG), said the sale was a move to focus on the (AIG)'s core insurance business. "The combination of AerCap (DEA)’s young fleet of in-demand airplanes and proven portfolio management capabilities with (ILFC)’s attractive order book and broad marketing reach will continue to lead the industry. However, as we have said all along, the airplane leasing business is not core to our insurance operations. Upon completion, the transaction will have a positive impact on the (AIG)’s liquidity and credit profile and will enable us to continue to focus on our core insurance businesses," said Benmosche.
AerCap (DEA) will retain its name for the combined company, once the transaction is competed and (ILFC) will become a wholly owned subsidiary of AerCap (DEA). "AerCap (DEA)'s acquisition of (ILFC) will create the leading global franchise in the airplane leasing industry. This transaction presents a unique strategic opportunity to bring together the outstanding and experienced personnel from both companies and two attractive portfolios of modern airplanes on lease to a highly diversified customer base. Further, we believe AerCap (DEA) will now have the most attractive order book in the industry," said (DEA) (CEO), Aengus Kelly.
May 2014: Netherlands-based AerCap Holdings (DEA) has completed the acquisition of USA lessor, International Lease Finance Corporation (ILFC) (ILF).
AerCap (DEA) unveiled plans to acquire (ILFC) from the American International Group (AIG) in December 2013. “Under the terms of the agreement, AerCap (DEA) paid (AIG) $3 billion in cash and 97,560,976 AerCap ordinary shares, which represents an approximately 46% ownership position in AerCap’s ordinary share capital,” AerCap said.
Following the deal, (AIG) President & (CEO), Robert Benmosche and (AIG) (CFO)/Executive VP, David Herzog have joined AerCap (DEA)’s board. The remainder of AerCap (DEA)’s senior management team will comprise AerCap (CEO), Aengus Kelly, Keith Helming as (CFO), Philip Scruggs as President/(CCO), and Erwin den Dikken as (COO).
In tandem with the acquisition, AerCap (DEA) secured $3.75 billion in new credit lines, $1 billion of which is to be provided by (AIG). Kelly said this gives the company ample liquidity and capital resources for its future growth.
“With approximately $45 billion of assets coupled with a diverse fleet of 1,300 airplanes and an attractive forward order book, AerCap (DEA) will be a driving force in the industry,” Kelly said. AerCap (DEA) has another 363 airplanes on order.
(ILFC) (ILF) confirms that it has recently converted firm orders for eight Boeing 787-8s to the larger 787-9 model, making (ILF) the single largest customer of the type.
(ILFC) placed multiple orders for the 787 from 2005 to 2007, resulting in orders for 74 airplanes overall that were previously split between 41 787-9s and 33 787-8s. But Boeing (TBC)’s latest update shows that (ILFC)’s 787-9 order has increased to 49 and the 787-8 order has declined to 25 airplanes.
The conversions to the 787-9 include four airplanes powered by Rolls-Royce (RRC) (Trent 1000) engines, three powered by the General Electric (GEnx-1b) and one airplane with no engine selected.
(ILFC) still has not picked an engine supplier on the original order for 41 787-9s.
An (ILFC) spokesman confirmed the shift in the overall order mix, but did not elaborate on the reasons.
The switch means that (ILFC) stands alone as the largest customer for the 787-9. Since 2011, Etihad Airways (EHD)’s combined orders for 41 787-9s had meant that the type’s largest buyer was split between the two companies.
International Lease Finance Corporation (ILFC) will lease two Boeing 787-8 Dreamliners to the Neos (NEO) airline. The Somma Lombardo, Italy-based carrier operates leisure flights out of Malpensa International Airport to Southern Europe, Russia, Africa, the Middle and Far East, the Caribbean, Mexico, and Brazil.
Neos (NEO), which will become Italy’s first 787 operator when it takes delivery of the airplane in 2018, will use the type to expand its route network. (NEO) currently operates an all-Boeing (TBC) fleet of six 737-800s and two 767-300ERs.
This is not an incremental 787 order for Boeing (TBC).
October 2014: Netherlands-based AerCap Holdings (DEA) and USA lessor, International Lease Finance Corporation (ILFC) (ILF) have just completed their Information Technology (IT) systems integration, marking one of the final hurdles for the $3 billion acquisition.
Click below for photos:
ILF-787-8 - 2013-12
ILF-EMB-190-E2 - 2013-07
4 727 (JT8D), LSD OUT.
183 737 CLASSICS, LSD OUT.
52 +165 ORDERS 737NG (CFM56), LSD OUT.
1 737-3Y5 (CFM56-3) (25613, 9H-ABR), RF (MLT).
36 ORDERS 737-800/-900.
16 747, LSD OUT.
1 747-400F, LST (AAR).
15 ORDERS 747-400F.
5/5 ORDERS 747-400FLR (CF6-80C2).
76 +7 ORDERS 757, LSD OUT.
47 +12 ORDERS 767, LSD OUT.
1 767-306ER (27957, N281LF).
2 767-319ER (26264, N411LF; 29388, N381LF).
18 +49 ORDERS 777, LSD OUT (INCL 25 ER'S) (TRENT).
2 ORDERS 777-200ER (GE90-94B).
9 ORDERS 777-300ER (GE90-115B).
1 +73/4 ORDERS 787-8/-9 (Trent 1000)/(GEnx-1b) DREAMLINER, 787-8 (NWG) LSD 2013-06 - - SEE PHOTO - - "ILF-787-2010-11," INCLUDING 25 787-8 & 49 787-9:
2 ORDERS (2018-02) 787-8, LST (NEO):
16 MD-80, LSD OUT.
6 MD-11, LSD OUT.
16 A300/A310, LSD OUT.
142 +298 ORDERS A319/A320/A321 (V2500), LSD OUT:
15 ORDERS A318:
35 + 126 ORDERS A319 (CFM56).
150 ORDERS A320neo FAMILY:
90 +199 ORDERS A320 (V2500).
41 +95 ORDERS A321 (V2500).
58 +66 ORDERS A330/A340 (PW4168A), LSD OUT (INCL 10 A330-500).
3 ORDERS A340-600 (TRENT 500):
20 ORDERS A350 XWB-800/-900 XWB (TRENT XWB):
0 ORDERS A380-800 (GP7270) (5 PAX, 5 F), CANCELLED 10/10 ORDERS:
100 ORDERS (2018-03) EMBRAER E-JETS E2 FAMILY (GTF), INCLUDING:
25/25 ORDERS (2018-03) E190-E2 (GTF):
25/25 ORDERS (2018-03) E190-E2 (GTF):
1 AN-124-120, LST (VDA) 2003-04.
Click below for photos:
ILF-1-STEVEN UDVAR HAZY- FOUNDER-CENTER-2007-10.jpg
ILF-1-STEVEN UDVAR HAZY-2008
ILF-1-STEVEN UDVAR HAZY-2009-11.jpg
STEVEN UDVAR-HAZY, FOUNDER, CHIEF EXECUTIVE OFFICER (CEO), (2002-01), RETIRED (2010-02).
Steven left (ILFC) to become Chairman, Chief Executive Officer (CEO) of the Air Lease Corporation (ALE).
DOUG STEENLAND, CHAIRMAN, EX-(NWA) (2010-01).
PHILIP SCRUGGS, PRESIDENT & (CCO) AERCAP (DEA).
ERWIN DEN DIKKEN, (COO) AERCAP (DEA).
ROBERT BENMOSCHE, PRESIDENT & CHIEF EXECUTIVE OFFICER (CEO) AMERICAN INTERNATIONAL GROUP (AIG), PARENT OF (ILFC).
HENRI COURPRON, CHIEF EXECUTIVE OFFICER (CEO) (ILFC) (ILF), EX-AIRBUS (EDS) NORTH AMERICA (2010-05), RESIGNED TO BECOME CHAIRMAN, PLANE VIEW PARTNERS (PVP) AND LATER (2015-04) AS STRATEGIC ADVISOR TO BOMBARDIER AEROSPACE (BMB).
December 2010: New International Lease Finance Corporation (ILFC) (ILF) CEO, Henri Courpron, took the helm from Founder, Steven Udvar-Hazy, is up against formidable challenges: a negative debt outlook, restocking an aging narrow body fleet, fending off more nimble competitors, and a parent company that is looking to sell off non-core assets. Those who have worked with him, describe Courpron is an astute observer of the airline industry. “He would not have taken the job at (ILFC) if he didn’t have a good idea where the company should go,” says one executive. A native of France, Courpron has been in the industry since 1987 and held senior positions at Airbus (EDS), including Executive VP Procurement, and President & (CEO), Airbus North America. Before joining (ILFC) in May, he was President of the Seabury Group.
Although (ILFC) and other airplane lessors were hit hard by the aviation industry’s downturn, industry analysts see a lot of growth potential in the coming years. “Absent plague, pestilence and asteroids, aviation is a business that everyone forecasts will be bigger 20 years from now, because population doesn’t look like it will stop growing,” says George Hamlin, President of Hamlin Transportation Consulting. The question is whether (ILFC) can tap into that growth as successfully as in the past. With about 1,000 airplanes and 180 airline clients, Courpron calls the company the “mutual fund” of aviation finance — big enough, broad enough and diverse enough to weather any downturn. “We [leased] 200 airplanes this year, which is more than the entire portfolios of all our
competitors combined, except for [GE Capital Aviation Services (GECAS) (GEF)],” he said, referring to (ILFC)’s chief competitor.
But while Courpron sees (ILFC)’s sheer heft as one element of its continuing strength, others say the era of the (ILFC)/(GECAS) duopoly may be ending as smaller lessors — including Udvar-Hazy’s new Air Lease Corporation (ALE) — enter the business. “More nimble and aggressive players with younger fleets have proven that size doesn’t matter,” noted Teal Group analyst, Richard Aboulafia. He pointed to the smaller company’s narrow body orders as a sign that lessors specializing in wide body aircraft may be left behind. “You can’t beat an A320 or a 737-800 in terms of sheer popularity in the market,” he said.
Courpron conceded that narrow bodies are a weak spot in (ILFC)’s future. (ILFC) maintains a 70% to 30% narrow body to wide body split, but has no outstanding orders for single-aisle airplanes. Courpron asked, “Everybody else seems to be buying A320s and 737s, and they’ll have to compete against each other, so why should I?” But he acknowledged that “we need a good book of single aisles” and said (ILFC) will make decisions to reinforce its narrow body portfolio “in the near future.” (ILFC) has been noticeably quiet on the debate surrounding re-engining of the A320 and the possible update of the 737, and Courpron is vague when asked whether he supports either move. “We will do what’s right for (ILFC),” he said. Aboulafia said (ILFC)’s caution in ordering narrow bodies may prove to have been prescient, now that Airbus (EDS) is updating its platform and Boeing (TBC) may follow suit. This could dilute the value of older, less-capable 737s and A320s.
But there is no debate when it comes to (ILFC)’s nearly unassailable position on the leading edge of the wide body market, where it has $14 billion worth of airplanes on order. (ILFC) has some of the earliest available slots for both the 787, scheduled to enter service in 2011, and the A350, which is expected in 2015. (ILFC)’s 74 orders for 787s should give it a dominant position among lessors for at least five years. Courpron also holds an advantage on the A350, because rival (GECAS) (GEF) is unwilling to order an Airbus (EDS) jet powered with engines made by Rolls-Royce (RRC), a competitor to (GEC). “We will have a dominating position in the wide body market that cannot be matched by our competition,” said Courpron.
(ILFC) also has orders for 10 A380s, according to Airbus (EDS), but Courpron hedged, when asked about them. “We have an A380 order that is flexible enough to give us enough time to consider whether we want to be in this business,” he said.
(ILFC) is not ordering 747-8s because it does not see enough demand from airlines over the 20-year life cycle of the airplanes. More surprising is that (ILFC) has no 777s on order. “We believe strongly that the 787 and A350 will be successful airplanes and will be in high demand,” said Courpron. One of Courpron’s top priorities is to refashion (ILFC)’s financing structure for an era of tighter credit. Udvar-Hazy sold (ILFC) to (AIG) in 1990 to access cheap financing by leveraging (AIG)’s sterling bond rating. That arrangement worked well for years — until the global financial crisis hit in 2008, and (AIG) was threatened with insolvency. Courpron has diversified (ILFC)’s funding sources and has spread the company’s debt maturities over several years. “We spread the maturities over years, so we don’t have big chunks of financing coming due every year,” said Courpron, adding, “we can manage our maturity profile with our free cash flow and repay our debt.” $30 Billion In Debt Outstanding (ILFC) has refinanced $13 billion in capital this year alone.
Courpron credited this with enabling (ILFC) to focus on its turnaround plan rather than on servicing its short term debt. “We have long-term assets and had short-term financing,” he noted. “When it works, that’s a great plan, as it allows you to borrow cheap money. But we now have to ensure that financing lasts the length of the asset.” Although this may be true, (ILFC) still has about $30 billion in debt outstanding, and in 2011, about $6 billion will come due, said Standard & Poors analyst, Chris DeNicolo. He estimated (ILFC)’s cash flow to be about $3 billion, so $3 billion of the debt that is coming due, will have to be refinanced. “This is why we have a negative outlook,” said DeNicolo. In addition to restructuring debt more like a standalone company, Courpron has brought in a new management team. They include Chief Investment Officer, Heinrich Loechteken, formerly of Netherlands-based airplane lessor, AerCap Holdings (DEA), and Airplane Adviser, Pierre Vellay, a veteran of Air France (AFA). A big question is (ILFC)’s future with (AIG), which recently sold off its rail car leasing unit, as part of an ongoing effort to shed non-core assets. Earlier this year, (AIG) indicated that (ILFC) was for sale, a prospect Courpron approached with equanimity. “We are not an insurance business, and (AIG) is an insurance company, so we’re non-core,” he said. “But do I lose sleep over being non-core? No. We are strategic non-core, and our mission is to run (ILFC) for the long term in the best possible way we can.”
KEITH HELMING, CHIEF FINANCIAL OFFICER (CFO) AERCAP (DEA).
ELIAS HABAYEB, CHIEF FINANCIAL OFFICER (CFO), EX-(AIG) (2011-05).
PHILIP SCRUGGS, EXECUTIVE VP & CHIEF MARKETING OFFICER (CMO) (2011-03).
ALAN LUND, VICE CHAIRMAN (ILFC) (ILF) & TEMPORARY INTERIM PRESIDENT & (CEO) (2010-04).
HEINRICH LOECHTEKEN, CHIEF INVESTMENT OFFICER, EX-(DEA).
COLIN BOLE, SENIOR VP, HEAD (ILFC) EUROPE, MIDDLE EAST, & AFRICA (2011-02).
PETER CHANG, SENIOR VP, HEAD GREATER CHINA (2013-10).
DAVID NIXON, SENIOR VP TRANSACTIONS (2010-09).
MS MAGGIE LUCIANO-WILLIAMS, SENIOR VP HUMAN RESOURCES (HR) (2010-12).
STEVE ADAMS, VP TECHNICAL, RESIDENT REPRESENTATIVE, BOEING.
PIERRE VELLAY, AIRPLANE ADVISOR, EX-(AFA).