The Surprising Economics of Aviation

The New York Times had a great piece yesterday on Steven Udvar-Hazy, founder and chief executive of the International Lease Finance Corporation and one of the most powerful figures in commercial aviation. His business model consists of buying and leasing a massive fleet of planes to the majority of the world’s major airlines — “massive” meaning, in this case, “larger than any of the airlines themselves.” From the article:

He owns more planes than the industry leader, American Airlines, which has 679, and more than the combined holdings of Air France (265), Lufthansa (245) and British Airways (239).

It’s both surprising and impressive that a single man who first started buying planes as a college student has gained and held such overwhelming control over an industry made up of around 28 million people worldwide. And that’s not all; via the Times:

Nearly half of the airplanes flying today are leased by the airlines, and Mr. Hazy, with his $45 billion portfolio, is the biggest player, as measured by dollar volume, followed by General Electric.

In the 35 years he has been in business, Mr. Hazy has ordered 706 Boeing jets and around 600 from Airbus, making him the top customer for both companies.

All of which means that, the next time any one of us steps on a plane (as Stephen has all week) there’s a good chance it will be owned by Hazy.