YouSaid · the spoken record

Steven Udvar-Hazy

lines on the record: 88
first: 2023-09-04
most recent: 2023-09-04
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“No, because I know how airplanes are designed and built. So I adapt really quickly. And I can sleep easily anywhere. I'm like a horse. I can sleep standing up.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“I think you need all of those. I was fortunate that my father exposed me to aviation at such a young age. and that I immediately connected. Myself to that I think having come from a background where I grew up in a communist, oppressed country, But then you have a certain amount of energy that propels you to achieve greater things. And that comes from within. It's not something you can learn in school. So I'm very grateful for what America has enabled our family to achieve. And having this passion For aviation and airline business. Just that's been the fuel that kept things going.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“That's a good question. Look, the idea of retirement doesn't have a lot of appeal. I'm not a good golfer. I'm not a retiring type. So I plan to continue to work and hopefully add some value to the industry and creating this spark in young people about aviation and aerospace.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“A little bit we look the clientele that we had Generally, airlines that are also releasing planes from Isle of C. But I would say that once we left and started Air Lease, most of the airlines went with us. They did either no or very little future business with ILFC, particularly since it was still under this government AIG umbrella. So, I would say a large number of the customers that I left he had migrated to Erlis on their own volition.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Correct. We raised about $1.2 billion. Said we will provide $100 million of equity, cash equity, and then we'll raise another billion from outside investors, including banks and well-known private equity firms and international institutions. And that was oversubscribed. So we raised about $1.2 billion within a few weeks after the company was formed. We didn't have any airplanes, but we already had capital lined up.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“You were coming to the table with so much experience at this point and such a great track record that you were able to raise money quite quickly. From big banks, like over a billion dollars you were able to raise that”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes. Well, and it was also, I think, an opportunity to create a new enterprise and to create wealth because Not only my family lost a lot on this, but every executive at Isla C that had AIG stock.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“In Century City. And so as word got out that Steve Hosey starting a new aircraft leasing company, my phone started ringing. And so most of the senior officers said that they've had it with AIG as well.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but maybe on a smaller scale, I didn't want to have a thousand aircraft And $50 billion balance sheet. But we learned a lot In those 35 years, and even in the years before International East Finance. So we said, okay, let's start it. At that point, I didn't really involve any of the other people at the company.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“So you step down from ILFC, this company that you founded, but you knew you must have known that you were going to start a new company pretty soon after, right? I mean, already in your mind, you probably need the next day.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, we had a family council gathering with my wife and our children, and we said, okay, we can either continue this status quo, or we put this chapter behind us and start fresh. The unanimous decision was made to start fresh. So on February 3rd or something of 2010, I submitted my retirement papers. And that was it. They were in shock. But I said, look, we've had our fun. I've tried. And this is not what I want to spend the next 10 years working for the government.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it was more than that. It was a great tragedy. And the company would have gone under had it not been for the US government.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Exactly, and we became paralyzed. We couldn't buy, we couldn't sell, we couldn't finance. We had our existing book of business. Airlines continued to pay rent. You know, we had an ongoing business, but it was like in a cage, like an animal that's in a cage.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And that basically AIG turned out to be a huge disappointment that almost caused the collapse of the global financial system. Nothing I could do to”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, so here's what happened AIG was a very, very capable insurance company. They went off tangent with this guaranteeing other people's obligations. And they really had no business guaranteeing subprime loans. And so when everything started to crumble around September, October of 2008, AIG would have become insolvent immediately had everybody called in the guarantees. And that's precisely why the US government did an emergency rescue of AIG By injecting $185 billion, which was more than the whole automotive industry, the whole high-tech industry received. No other company got as much financial bailout as AIG. And of course, Congress and the government came down really hard. How could you have allowed yourself to be in this situation to begin with? And here we are. The company just made a billion dollar profit.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“When you found out about this, because I have to assume that you didn't really know, I mean, that's not your business insurance. You were running the airline division, essentially, of AIG. I guess AIG was ensuring these loans that seemed secure, but that had a massive impact on your ability to run your business.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“And guarantees and instruments and subprime mortgages that were then packaged into various derivatives that were bought by all kinds of investors.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“For what America has done for me and my family, this was the least I could do to give back something to America that had value to millions of people and children”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Kind of what they expected. And I said, No, no, no, not $60,000, $60 million. And they just about had a heart attack. This took about five minutes. Said, if I don't do it, nobody else is going to do it. Somebody's got to jumpstart this project. So they were in shock. And then later on, a few months later, they said to me, well, the regents and the government and the Smithsonian Board. Want to name this museum after your family? I said, Well, that's not the reason I'm doing this. The reason I'm doing this is I want other young people in the US and visitors to be captured by the thrill of flying and aviation and space. And then they said that the budget had gone up to $130 million. So I said, okay, we'll go to $65 million. And then the project was go full steam three shifts a day. And I just felt...”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“A couple of gentlemen called my assistant in Century City, California said, we'd like to have an appointment with Mr. Haze. We want to talk to him about an aviation museum. Take a big plot of land at the Dulles Airport to eventually build a new museum that would open in two thousand three. Would be the one hundredth anniversary of the first flight of the Wright brothers. So I listened to this and I said, oh, that's really nice, blah, blah, blah. And I said, Well, what is this thing going to cost? They said it's going to cost anywhere from $120 to $130 million. And that was their estimate. So I said in five minutes, I just thought about it. I said, okay, I'm in for 60 So these two older gentlemen thought that what I meant is I would contribute $60,000.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“We could get a cheaper than our competition. AIG was doing extremely well in the 1990s. And I was like the third largest shareholder. So by the time AIG stock peaked, it was in 2000. Our holdings in AIG stock were considerable. Was about five times more than when they acquired the company.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“The benefit was that I think they were only one of half a dozen companies in the world that were AAA rated. Credit rat So immediately Isle of C's credit ratings, which were separate, AIG never guaranteed one penny of our debt. Our credit quality immediately went up.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Wow. And so then at that point, you become, I mean, AIG becomes your boss, right? But essentially, you continue to run ILFC. I mean, did it substantially change how you ran it? I mean, did you have...”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, I think 68% of the company was still owned by the insiders. The Gandhis and myself and my family, and the public had, I think, 32%. So they did really well. We decided That we would each take one and a half million cash, the three of us, and the rest we would exchange our shares for AIG stock.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“I think the major change which had never been done before was that in 19 What we did after going public is we would buy new and used aircraft when we could match them up to an airline. But then I realized that we could get much better leverage and discounts and More weight if we could buy aircraft in bulk. And that was really a landmark gutsy decision because It was the first time that Boeing would sell quantities of aircraft to an aircraft less sore who couldn't even identify where these planes are going to go. But we had a lot of confidence that we would place the aircraft. And then we did a deal with Boeing. Ordered 130 brand new planes, speculatively. People thought I'd lost my mind. Including 747 four hundred, which is the largest plain in the airline industry.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“The underwriters were teasing us that we should hire a couple of part time college kids or something so we could say that we had more than 10 employees and then let them go the day after the IPO. But we didn't do that. But it was kind of oddball to have a public company with eight employees, including the three founders.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Recession year, yeah. Yeah. And so we decided this is not a good time to go public. But the following year, I suggested to our team that we focus more on the smaller investors rather than the big institutions. We did lots of road shows to probably like 40 different cities. And we raised $26 million in an IPO on Nasdaq.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Right, and they all made money. No one ever lost a penny. They all made money. They all did very well. Now, then we had a number of companies like EF Hutton and other Solomon Brothers came to us from Wall Street saying, why don't you guys go public? You've got a great future, blah, blah, blah. So we gave that a try in 1982, but the markets were very...”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Oh no, we were profitable, but we could scale up using limited partnerships. And Leslie Gonda was extremely supportive of this company. And he brought in some of his friends to invest $50,000 or $100,000 in a deal. International East Finance Court would be the general partner, and we would also invest money. But the limited partners would invest most of the equity, and then we would get a management fee. So in other words, for every million dollars of equity we had, we really had five or six million of equity because we leveraged it with these limited partnerships”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Then you have oil price thrown aways or high interest rates or recession. And the airline industry is very vulnerable to those changes. And so you could have multiple years where airlines are suffering and losing money So you have to endure and survive this roller coaster.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Well, it had a major effect. So in 19 Bought our first brand new plane, brand new, seven thirty seven from Boeing, and released it to a British airline called Britannia Airways, which was the largest charter airline in Europe. So we already reached the level of activity where we could buy a $7.5 million brand new plane. It accelerated the fleet modernization of airlines in the late 70s, early 80s. And that really gave our company a tremendous amount of tailwind. And just as a side note, we were very, very prudent with our money. I mean, when we started International East Finance, I remember our salary was $600 a month. And maybe three or four years later, it was still like $1,000 a month. So we were not very extravagant. And also, it's a very volatile industry. You have several years of positive growth and profitability.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“I mean, this speaks to the idea, and I've heard this from people before, which is You can actually invest in things and buy lots of things without any money. If you figure out how to do the deal, like, And very wealthy people buy properties and make huge investments without money because they will figure out a way. To do a leasing deal or something like this. I mean, essentially, you didn't have the money to buy the planes.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“But we gave him a $10,000 per plane deposit. So while you're going through that routine, you concurrently run a marketing campaign and try to locate potential customers. We give them a $100,000 deposit. And then North Canada Air was willing to lease three of them for like $7,500 a month each.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, a month and a half later. It was another interesting coincidence. I may mention to you that there were these airlines in the western US that merged together and became Air West. And then Howard Hughes bought that company, became Hughes Air West. They had around 20 some of these 40 seat turboprop, what was called Fairchild F27s. And they were transitioning to more jets and phasing out these turboprop Fairchild aircraft. And so we made a deal to buy 10 of these planes. We didn't have $3 million or 2.8 million.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Our ambition was maybe we could have eight to ten, maybe 12 planes. We make a nice living off of it, and I could still continue to do some of the other stuff brokering, consulting. We have no idea that within a few years we would develop into the largest aircraft leasing company. We had none of these”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“All right, so in 1973, you have the seed money to start your company, what became International Lease Finance Corporation, you actually went into business with two friends of the family, Leslie and Lewis Gonda. And these guys were Hungarian. He was a Hungarian businessman. He was a father and son. And I guess they became co-investors and partners.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“There's a conference room with two bottles of tequila on it, nothing else. The end result is by midnight I convinced this gentleman that signing this, co-signing the lease and guaranteeing the lease payments of another government-owned entity was not a risk. And I said this would bring in thousands of tourists and would help the Mexican economy and blah, blah, blah. So he, after five glasses of tequila, he asked his secretary to bring out his big seal and the wax and the ribbon and he just put that they'll unconditionally guarantee the lease. Bingo, I went back to LA. The bank said, okay, this is exactly what we wanted. And on September 20th, 1973, I bought a Douglas DCA for $2.2 million from National Airlines. Least hit the Aero Mexico, which today is one of our best clients in Latin America.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“So I went around, went around, went around until I found one bank in California called United California Bank that said yes, sir, if you get a government agency guarantee, then we will give you a $1.7 million term loan. So I went down to Mexico City and I asked Aero Mexico to arrange a meeting with a government agency that had credibility and they made an appointment for me at 10 o'clock at night. I remember Mexico City with the head of that agency. There were armed guards and so on.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Right, exactly. So maybe I'll give you an example, and one of them was Aeromexico, which was the government airline of Mexico, and they needed a DC-8. I found an airplane in Miami that was owned by National Airlines. And I talked about MayTag, who's president into selling that plane to us with four brand new engines for about 2.2 million dollars. I didn't have 2.2 million dollars. But I figured I'd put up around $150,000 equity and then get a bank loan. Aero Mexico didn't want to buy it. They want to lease it. Went to a lot of banks. They all said no thank you. We don't want to finance a plane that's going to be registered in Mexico.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“And so you do a bunch of these deals, and over time you start to accumulate some cash for the business that you really want to build, which is your own leasing company. You want to be the guy leasing planes. You want to do what Lockheed did.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Both equity and debt capital. And so I felt that for a few years, I need to continue amassing capital through the various transactions that I was doing before. And in fact, I increased the intensity of that activity.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so this was 1969 you begin to wind down asteroid air. 23, and you had seen who was making the money. The person, the people making the money when you were running Asterair wasn't your airline. It was Apache Airlines, the leasing company that was leasing you this airplane, because they had to be paid whether you landed or not, whether you had a full plane or not, whether the weather halted your flights or not. They got their money. Exactly.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes. So there were two sides to it. There's a sense of failure. And recognition that at that age a person is somewhat naive, but at the same time, I thought it was a very valuable lesson. About running a business, and I did have an appreciation that I went through this experience early in life rather than later.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yes. I would say I lost about half of everything I've earned. that time on the airline venture, but I also had a lot of people, relatives and friends of my parents and other acquaintances that invested in the airline, some thousand dollars, some $5,000. And I made a pledge to pay them back. So over the next several years. Starting in 1969, 7071, when I was about 23 24 25 years old I paid everybody back”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“The chief pilot was $750 a month, and the other pilots were $600 a month. So, anyway, we finally decided this thing is losing money. I found a buyer for the airline out of Las Vegas. And so I decided then and there I'm never going to have an airline again. I'll work with airlines. I don't want to be an operator of an airline.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“If the airport up there was fogged in, he still got this $4,500. And that was a turning point mentally in my life where I decided running an airline is a miserable thing. It involves people, regulations, fuel, airports, reservations. It was just a nightmare to run an airline. It's 24-7 and everything goes wrong. And I said, The guy that was making money off this project is the guy in Arizona.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“And it was leased from a company in Phoenix, Arizona called Apache Airlines And I met the guy who was the president, and he said, Look, I can do it one less plane because business is a little slow. I'll lease you this plane for $4,500 a month. And this was a turning point in my life because whether five passengers showed up for our flight or ten or twelve, this guy got $4,500 a month, no matter what.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“My girlfriend at the time came up with the name. She was an art major. She says, I like that name Astro Air. So anyway, we had to apply to the California Public Utilities Commission, PUC. We had to go through hearings. We had to deal with the FAA. There was a lot of bureaucracy, which I hated. But here we are, and we get licensed to be an airline. And we were going to fly to an airport that's very close to Vandenberg Air Force Base.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“I mean, that's crazy money, yeah, part time, part time. But I was the full time lifeguard in the summer for the county of Los Angeles, and I love that job down in Manhattan Beach, Redondo Beach. And I would make probably about $1,200 a month. Three months, which I thought was pretty cool, and I had a convertible Mercedes. Almost a”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And I said, I'm going to take half of that money and start an airline, which is the stupidest thing I ever did. Plus, I bought a Mercedes 280SL, which is a two-seat convertible Mercedes, really jazzy.”
2023-09-04 · How I Built This with Guy Raz · Air Lease Corporation: Steven Udvar-Hazy · IDENTIFIED FROM THE TRANSCRIPT