Is This An Aircraft Ordering Bubble?

I pose the question to Steve Udvar-Hazy, legend of the aircraft leasing business.

Dear readers,

I rarely get nervous around anyone in aviation. Yes, I have some favorites — I like smart executives who have a plan and know how to implement it — but I don't idolize anyone. I cover business people, whose main job is to maximize investor value, and I don't see the point of deifying people because they make a lot of money. You know the cliche: it’s not curing cancer.

But I learned last week, to my surprise, that I have one exception. I was nervous (and maybe a little intimidated) to interview Steve Udvar-Hazy during our on-stage session at the Skift Aviation Forum in Fort Worth. As you know, Udvar-Hazy is executive chairman of Air Lease and the most successful aviation entrepreneur of my lifetime, who created the modern aircraft leasing model and built two massively profitable companies.

I learned I am not the only one who holds him in such high esteem. As we waited for our own interview at the Skift event, Sun Country CEO Jude Bricker told me his Udvar-Hazy story. In 2017, Bricker had just taken over Sun Country after leaving Allegiant, and he wanted to follow Allegiant’s model of buying used airplanes and flying them at low utilization. Udvar-Hazy must have known that, because he knows everything, yet he wanted to fly out for a meeting with Bricker, just in case. How could I turn down a meeting with a legend? Bricker remembered saying to himself. If aviation’s most successful living entrepreneur wanted to meet him, Bricker would entertain the idea of overpaying for airplanes his airline didn’t need.

Bricker stayed strong, but I wonder how many times over the years that trick has worked. It’s the ultimate salesman move: Udvar-Hazy himself hopping into the corporate jet and visiting a potential customer, even after he had personally made billions of dollars and no longer needed to hustle for incremental business.

Readers, I think you want to hear from someone like Udvar-Hazy, because he seems to know what's going to happen earlier than most insiders. That's partly because he's smart and knows so many people, many of whom tell him the real scoop. But it's also because aircraft lessors serve as an early warning system. If an airline can't make payments, or might not make payments, Udvar-Hazy is the first to know. And if the payments aren’t coming, we can assume the airline (or maybe the entire region) is in trouble.

So with that in mind, let's examine what he told me last week at the Skift Aviation Forum about potential aircraft ordering bubbles and a few more interesting topics.