ILFC: AIG's sale of the century

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05 January 2009

The sale of ILFC by AIG may seem unthinkable but there are extraordinary parallels with GPA. It looks likely that a private equity firm will buy ILFC. If the sale is nsuccessful it could be the worst thing ever to hit aviation finance.

September 1993: General Electric acquires GPA, saving the Irish leasing company, then the world's largest aircraft lessor, from collapse.

September 2008: American International Group collapses and the future of International Lease Finance Corp, now one of the world's largest lessors, is suddenly in doubt. A buyer is urgently needed.

The coincidence is remarkable. ILFC and GPA both suffered because of equity markets: ILFC because of a run on its owner AIG; in GPA's case through a failed initial public offering.

Although each firm employed some of the best people in the industry, each has been defined by one individual. Steve Udvar-Hazy, who arguably invented aircraft leasing, is the face of ILFC. The late Dr Tony Ryan, who also founded Irish low cost carrier Ryanair, epitomised GPA.

With hindsight, it is easy to see why GPA's IPO failed, yet at the time it was a huge shock to everyone, including many...

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