Air Lease files for $100m IPO

Seattle: Air Lease Corporation, Steven Udvar-Hazy's new jet-leasing company, filed for an initial public offering Friday of as much as $100 million (Dh367 million) to help the lessor add jets as the air-travel market recovers.

"We believe that we entered the aircraft leasing industry at an opportune time, as both airlines' use of net operating leases and the demand for air travel are expected to grow in the near future," a Los Angeles-based Air Lease spokesman said in a regulatory filing Friday.

An Air Lease spokesman said in July it had raised about $1.3 billion of equity capital and received $2 billion of debt commitments to begin buying aircraft, with plans to exceed 100 airliners by early this year.

The company extended that target Friday to the end of 2011, saying it has ordered 148 aircraft through 2017, valued at $6.2 billion.

As of December 31, Air Lease's fleet consisted of 36 narrow-body aircraft and four wide-bodies.

Flexibility

Aircraft lessors such as Air Lease and General Electric Company's Capital Aviation Services buy planes and lease them to airlines, giving carriers more flexibility in their fleets and helping them keep billions of dollars in purchases off their balance sheets.

The industry began in the 1970s, and aircraft-operating leases now make up about 35 per cent of the more than 19,000 airliners in service, according to the filing.

Air Lease predicts that the number of planes on lease will grow by more than 25 per cent in the next five years.

Global air traffic grew 8.5 per cent last year through November, recovering from a record 3.5 per cent decline in 2009 because of the recession, according to the International Air Transport Association.

Growth is slowing toward normal levels in the five per cent to six per cent range, IATA said December 30.

Udvar-Hazy founded International Lease Finance Corporation in 1973, selling it to insurer American International Group Inc. in 1990.

He built that firm into the world's largest plane lessor and the biggest customer for Boeing Company and Airbus SAS.

Udvar-Hazy resigned in February 2010 and created Air Lease with former ILFC executive John Plueger.

From February to September of last year, Air Lease recorded a net loss of $49.4 million on revenue of $21.5 million, the company said in Friday's filing.