Assignment(s)
What are some of the major political and social issues that have arisen as millions of people have taken to the skies over the past 30 years? Click HERE for a cheat sheet.
Background
Mr. Házy was born in Soviet occupied Budapest, Hungary in 1946, into a well-to-do family. The war in Europe had just ended, following Soviet capture of Berlin and subsequent German surrender. He had been interested in aviation from a young age, having been introduced to air shows at age seven by his father. As a young boy, he would study flight schedule brochures he would pick up from the ticket offices of all the international airlines. In 1958, the Házy family fled to Sweden, and then to the United States and settled in New York. In 1962, the Házy family moved to California, where Mr. Házy attended UCLA.
When Mr. Házy was 21 years old, he used to hang around airports where he became friendly with local pilots. One of the pilots at Reeve Aleutian Airways mentioned that they were trying to buy an Electra aircraft as they were good in the arctic cold of Alaska, and to let him know if he knew of anyone selling one. Mr. Házy had read that Air New Zealand was getting ready to sell one of their Electra aircraft and he approached them. He told them that he may have a customer for them, but he'd charge a 5% fee if the sale went through. They agreed, and when the sale was complete, Mr. Házy had earned himself $50,000 (5% of $1 Million). On the heels of that deal, Mr. Házy helped Air Alaska lease a Boeing 737 to Air Mexicana for $74,000 a month.
As the jet age dawned in the late 60's, Mr. Házy realized that the cost of the new aircraft would be significantly more than what most airlines could afford. He saw an opportunity and launched International Lease Finance Corporation (ILFC) with two fellow Hungarians. At the time, the idea of leasing aircraft was not common--after all, conventional wisdom said that if you own the aircraft, you have more control over it and once it is paid for, it continues to generate profits over the life of the machine. All that changed after leasing was introduced. Now, smaller carriers could lease aircraft as needed to serve small routes. Furthermore, international airlines could not burden the up-front cost of purchasing the aircraft, and for them, leasing was the only viable option.
Throughout the 1970's, there was increasing pressure on the US Government to deregulate the airlines. Up until this point, the airline industry had been treated much like a utility such as railroad or the electric grid. In 1978, the Airline Deregulation Act was passed (External Link), and small airlines within the US could launch new routes without fear of being sued by the more established monopolistic airlines, or the Government. The deregulation was in no small part due to the tireless efforts of a few prominent industry leaders, such as Steven F. Udvar Házy.
Throughout the 1980's, jet travel grew by leaps and bounds, in large part to the availability of aircraft through leasing. Many small airlines were launched, many of whom were in turn bought by the larger airlines and operated as subsidiaries serving shorter routes.
In 1990, ILFC was sold to American International Group (AIG) the insurance giant, though Mr. Házy remained chairman of the board, operating the subsidiary. The 1990's brought a new era in travel as the reservation system moved from an agency based system to an online booking system, facilitated by the internet. This provided additional opportunity for small carriers to get into the business by targeting underserved markets.
Around 2000, Mr. Házy donated approximately $65 Million to the Smithsonian Institution, to fund an extension of the National Air and Space Museum. Completed in 2003 and located in Dulles, VA, the new extension houses some of the most incredible aircraft ever produced.
In 2009, ILFC was put on the market as the assets of AIG were dismantled. The same year, Mr. Házy retired from ILFC. Never one to be far from aviation, Mr. Házy saw an opportunity in the market for energy efficient aircraft. In 2010, Mr. Házy founded a new company, called Air Lease Corporation, which will focus on leasing energy efficient aircraft. At the 2010 air show in Farnborough, Air Lease Corp. was the largest purchaser of new aircraft, with an order for 136 new aircraft worth over $10 Billion!
Industry projections have stated that within a few years, over 50% of the world's commercial aircraft fleet will be leased!
Impact
It is often said that we live in "The Global Village" or "It's a small world." There are a few key innovations of the 20th century that have made this possible. While the printing press brought knowledge to the masses, it was affordable jet travel that made the world a smaller place. From the 1970's onwards, anybody anywhere could travel to just about any part of the globe, that they had read about. Beyond moving people, affordable jet transport also drastically lowered the time and cost of shipping packages. What once took weeks or months by ship, now takes just hours or days, for a comparatively reasonable cost. UPS and FedEx simply would not have been economically viable before the advent of aircraft leasing.
By the 90's, people were frequently traveling for business and pleasure. The internet put a whole new spin on what affordable air travel could mean. Until fairly recently, people formed close relationships with people they came into contact with through work or other proximity based association. The internet made it possible to meet people online through dating sites such as Match.com, and more recently, social networking sites such as Facebook. Affordable jet travel has allowed many online relationships to extend to the real-life, which could never have happened otherwise. The ability to travel to/from just about any city on the planet has allowed people to form a better understanding of foreign lands and peoples. If it's true that travel is a form of education, then affordable jet travel has made this education accessible to millions of people!
It was the pioneering work of Steven F. Udvar Házy in the area of aircraft lease financing that allowed hundreds of budget airlines to service thousands of routes and millions of people... just as Gutenberg's press facilitated mass publishing and knowledge distribution.
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