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Why Is AIG's Aircraft Guru Taking Off?

News that Steven Udvar-Hazy, the founder and head of American International Group's aircraft leasing business, International Lease Finance Corp., has his parachute on and is halfway out the hatch could be construed as another bad omen for the debt ridden insurer.

Udvar-Hazy, known for both his mustache and passion for aviation - a section of the Smithsonian Air and Space Museum is named after him - headed up what was once a lucrative crown jewel of AIG, the business of buying and then lending planes in the chaotic world of the airline industry.

But, like every other piece of the AIG puzzle, it became caught up in the whirlpool created by the London-based Financial Products unit, which made trillion dollar bets on credit default swaps, and brought down the house.

Like a good soldier, Udvar-Hazy has never commented publicly on what happened, although he might when he's no longer affiliated with AIG. But he has made attempts to rescue at least part of ILFC by working with private equity firms to buy it.

Thus far AIG has resisted attempts to unload the unit, and in fact, has not even responded to one offer of $12 billion. But the "why" has never been explained. ILFC is not an insurer, per se, so it is definitely not one of AIG's core holdings. One possibility: AIG CEO Robert Benmosche is waiting for the price to go up, as it apparently has with its Asian life insurance unit Alico, which MetLife reportedly wants to buy for about $15 billion. As far as Udvar-Hazy is concerned, like former Chief Counsel Anastasia Kelly, he may have wanted more money or had a falling out with the boss. A third possibility is that this frees him to pursue plans to buy ILFC.

What's clear is that Udvar-Hazy, who has a reputation as an aggressive CEO, wouldn't want to sit around waiting for something to happen. He already lost the position of chairman in December to AIG board member Douglas Steenland, who formerly ran Northwest Airlines, and media sources say he's due to be replaced as CEO by John Plueger, ILFC's president.

Happy landings, Steve.