AIG's plane-leasing unit says survival is in doubt without new loans

[babylonsister]

AIG's plane-leasing unit says survival is in doubt without new loans

Peter Pae And Martin Zimmerman
March 26, 2009


In more potential fallout from the financial woes of insurance giant American International Group Inc., the world's largest aircraft leasing company warned Wednesday that its survival was at risk if it couldn't get additional loans.

International Lease Finance Corp., AIG's Century City subsidiary, said in a regulatory filing that access to financing had been hampered by its parent company's troubles and that without new loans "there could exist doubt concerning our ability to continue as a going concern."

But by Wednesday afternoon, International Lease Finance sought to downplay the message, and most industry analysts said there was no cause for alarm. Either way, airline passengers were not likely to see any effects on their travels.

Experts said they doubted AIG or the U.S. government, which now owns a large chunk of the insurer, would let the subsidiary fail. And in an interview, International Lease Finance's chief financial officer said the company was not in danger of defaulting on its debt obligations.

The company's filing with the Securities and Exchange Commission was meant to detail "a worst-case scenario," said Alan H. Lund, the chief financial officer. "We have the liquidity to satisfy the requirements."

Still, the possibility that the company could have financing problems sent a chill through the aviation industry, which is in the midst of one of the worst travel downturns since the Sept. 11, 2001, terrorist attacks.

The company, known as ILFC, owns 955 passenger jets, and its planes are flown by nearly every major airline. It is the biggest customer of Boeing Co. and Airbus, the world's only two remaining makers of large commercial aircraft. A Boeing spokesman said the company was closely monitoring ILFC's situation.

more...

http://www.latimes.com/business/la-fi-aig-planes26-2009mar26,0,6089087.story

[Dennis Donovan]

1. Hmm... maybe they should go into the Cessna-150-rental market...

...so us peons can fly ourselves.;):hi: