ILFC Shakeup: Udvar-Hazy Out, Steenland In - UPDATED

[Matt Molnar]

Udvar-Hazy Replaced by AIG Director Steenland as ILFC Chairman

By Jeran Wittenstein and James Gunsalus

Jan. 24 (Bloomberg) -- Steven Udvar-Hazy, chairman of the airplane-leasing unit American International Group Inc. is trying to sell, has been replaced by Douglas Steenland, the former chief executive officer of Northwest Airlines Inc., according to International Lease Finance Corp.’s Web site.

Udvar-Hazy, who remains CEO of the aircraft lessor he founded, may leave the company as early as this week, the Wall Street Journal reported today, citing unidentified people familiar with the situation. John Plueger, ILFC’s president and chief operating officer, may be named Udvar-Hazy’s successor, the newspaper said.

AIG has been trying to sell the Los Angeles-based leasing business as the insurer seeks to raise capital to help repay $182.3 billion in aid from the U.S. government. Udvar-Hazy, 63, has had to turn to parent AIG for funds from the bailout after the market for securities issued by the biggest customer of Boeing Co. and Airbus SAS dried up following the failure of Lehman Brothers Holdings Inc. in 2008.

[Midnight Mike]

That is huge and will shake up the aviation business, Udvar-Hazy is well known, oh well, Hazy will make a great consultant.

[Matt Molnar]

Financial Times:

AIG scraps sale plan for aircraft-leasing unit
By Francesco Guerrera and Justin Baer in New York

Published: January 26 2010 01:13 | Last updated: January 26 2010 01:13

AIG, the US government-controlled insurer, has decided against a sale of its aircraft- leasing unit after concluding it would not reap a big enough profit from the divestment of one of its crown jewels, according to people close to the situation.

AIG’s decision to keep most of International Lease Finance Corp, at least in the short term, will force the insurer to keep funding the division’s large balance sheet either through its cash resources or by raising debt financing.

That, in turn, could put further strain on the troubled insurer’s finances at a time when it is scrambling to repay about $80bn in rescue funds to the US Treasury and the Federal Reserve.