Steven F. Udvar- Házy has more than 40 years of aviation industry experience, has been awarded numerous honorary doctorate degrees and been a recipient of plenty of awards including The Living Legends of Aviation Award, the ISTAT Award, the Air Force Vandenberg Award, Officier de la Légion d’Honneur awarded by the Republic of France and many more. With five decades of experience, the living legend of aviation comes to share his insights into the industry at AIR 2018.
Why did you choose to work in aircraft leasing field?
Aviation has always been my passion. I attended my first airshow in Hungary as a child and aviation became my focus from that moment on. Once my family immigrated to the U.S., my time outside of the classroom was largely spent learning and understanding aircraft, airlines and air travel.
As I grew older, my knowledge of the industry allowed me to recognize that there were uncaptured business opportunities within aviation, especially in the 1960’s and 1970’s as the industry began really evolving. I brokered my first airplane deal in college, and then leased my first aircraft in my mid-20’s – a Douglas DC-8 to Aeromexico. Now five decades later, I feel fortunate that the opportunities that followed that original lease have allowed me to work in an industry that has captivated me for so many years.
What is the most remarkable change in aircraft leasing market you are looking for?
I am interested to see how lessor share of the marketplace will evolve. I was impressed when leasing accounted for 15% of the marketplace – that was in 1990. Now approximately 40% of the global fleet is leased. With airlines wanting more flexibility with their fleet planning decisions and OEM backlogs growing longer, I believe airlines will see additional value from working with their trusted order book lessors. Some say leasing will eventually hit 50%. We will have to wait and see, but the overall airliner market keeps growing!
What is the most interesting thing people don’t know about aviation leasing?
Aircraft lessors have enabled expansion within the airline industry that may not have existed otherwise. The ability to obtain aircraft quickly and cost efficiently via the lessors has enabled further development and growth of new airlines, including the LCCs, which in turn has helped to spur air travel. I think this is under appreciated by many. The cost of an aircraft has increased significantly since the early 70s when the industry transitioned to jet planes. Leasing has become a more cost effective option for airlines, especially those outside of the more mature US market.
As part of the lease, the airline will often hear the lessor’s views on aircraft selection criteria and benefit from our fleet expertise which is valuable. I have many examples of airlines that I have helped to start up, leased to them their first aircraft and now continue to work with them in updating and/or growing their fleets. Many of the individuals working within aviation are enthusiasts, like me, who have been working in the business for some time. Given that dynamic, relationships often span decades for many of us. I mentioned Aeromexico earlier which was the first airline to lease an aircraft from me. They are still my client today leasing brand new Boeing 787-9 aircraft.
More recently, I think relationships have become undervalued in the marketplace. But within aviation – and aircraft leasing, more specifically – I believe clients continue to understand the value of dealing with an organization they trust and a lessor that will be their long-term partner.
Your personal inspirations are…?
Of course I would be remiss to not acknowledge the inspiration I gained from the people who helped and advised me throughout my career, particularly when I was younger. I would note, among many others, Bob Six, CEO of Continental Airlines, as well as Herb Kelleher, co-founder and CEO of Southwest Airlines.
Aside from my personal relationships, I am inspired by the continued advancement of the airline industry and air travel which has really transformed the world in the last 50+ years. Air travel continues to progress such that the world has ultimately become more connected. I have always personally felt that aircraft symbolize a sense of freedom, especially to the world’s youth, and that the global connectivity air travel provides ultimately serves as a greater source of education. In many parts of the world air travel is a new luxury and, in many cases now, a necessity. I am fortunate to be in a position where I can play a very significant direct role in helping airlines make air travel accessible to the growing population of first time air passengers.