Aircraft leasing firm profits in comparative obscurity; International Lease Finance makes itself a quiet name.

While most aviation-related businesses have struggled during the current recession, one local company has prospered -- Century City -based International Lease Finance Corp. And it has done it without selling a single airline ticket or building one landing gear.

Manufacturers and airlines have cut their huge payrolls by tens of thousands of workers, or gone out of business, but ILFC has maintained its minuscule staff in its 39th-floor office on prestigious Avenue of the Stars.

Even though the company is involved in multibillion-dollar, international deals with major airlines, there are fewer than 50 employees at ILFC. Some people who know ILFC say the company has fewer than 20 employees. And that, said industry analysts, is one reason for the company's success -- as well as picking its customers carefully and a conservative business approach.

International Lease is a low profile operation, said analysts, who noted that too may be a factor in its success. It shuns publicity and only rarely reveals information about itself, said the analysts.

Company officials did not return telephone calls for this article. Even representatives of ILFC's parent company, insurance-industry giant American International Group Inc., are reluctant to talk about it. Officials at AIG, which is based in New York, also did not return phone calls for comment for this article.

What ILFC does is fairly straightforward -- it buys commercial aircraft from manufacturers and then rents them to airlines under operating leases. As much as 15 percent of the world's commercial airline fleet of about 6,500 aircraft is operating under such arrangements with companies like ILFC and its primary worldwide competitor, GPA Group PLC in Shannon, Ireland.

Currently, ILFC owns or has firm orders for 262 commercial aircraft, and has options on planes that could bring its fleet to more than 350 by 1999.

The value of the aircraft the company owns or has firm orders for exceeds $10 billion.

There are perhaps a dozen aircraft leasing companies in the world and GPA is generally considered to be the biggest with a 443-plane fleet. But GPA is having financial problems and ILFC is closing the gap, said financial analysts and industry expects.

"Simply put, the difference between the two companies is that ILFC has smarts and knows the business," said Myron Picoult, an analyst with Oppenheimer & Co. in New York. "They have been able to control the risk, have come up with a management methodology that works, has been visionary in understanding the market and has the most modern fleet in the business."

Picoult and the other analysts said there are three basic factors involved in ILFC's success:

* It has picked its customers carefully. Rather than leasing its planes to domestic carriers, most of ILFC's clients are overseas. Several U.S. carriers have either shut down or gone into bankruptcy during the past five years, which means that those carriers would not have been able to honor ILFC leasing contracts.

* It has kept its overhead low by operating with only a small staff.

* Because it did not expand rapidly in the 1980s when financing was easily available, ILFC has not become overly leveraged.

International Lease was bought by American International, a public company that had 1991 sales of $15.8 billion, in 1990 for an undisclosed amount. International Lease is headed by Steven F. Udvar-Hazy, who has the title of president and chief executive officer. The company's chief financial officer and senior vice president is Alan Lund. Neither Udvar-Hazy or Lund returned phone calls for comment for this article.

A month ago ILFC announced one of its biggest orders ever -- 82 aircraft from three manufacturers valued at $4.1 billion. The firm orders ranged from small twin-engine commercial aircraft to 747 jumbo jets from Boeing Co.

In addition to the firm orders, the deal included options to purchase another 25 aircraft through the end of the decade.

Industry experts and Wall Street analysts said that ILFC accounts for a relatively minor portion of the insurance company's revenues and profits.

The analysts estimated that ILFC probably produces less than 10 percent of American International Group's net income that in 1991 was $1.5 billion.

While GPA's fortunes are plunging following rapid expansion in the 1980s, ILFC's financial condition has improved, said the analysts.

International Lease gets financing on its own to purchase the aircraft and the loans are not guaranteed by American International, said the analysts.

"ILFC did not overexpand in the 1980s and become highly leveraged like GPA," said Daniel Murray, an analyst at Argus Research in New York. "They were more careful about who they leased aircraft to, which has turned out to be a significant thing because many of the domestic carriers are having a difficult time and have had to cancel orders."

Analysts said that only about 20 percent of ILFC's fleet has been leased to domestic carriers.

Another analyst, D. Gordon Luce at Brown Brothers Harriman in New York, said that ILFC also operates at a very low overhead. He noted that GPA probably has about 200 employees compared to only a handful at ILFC.