Investors in American International Group Inc (NYSE:AIG) are enjoying some lift-off this morning as the insurer is up 1.6% just after 1 p.m. EDT. Though headlines this morning were singularly focused on one segment of the company’s operations, the news shows a common focus of American International Group Inc (NYSE:AIG)’s management that investors should be excited about for future opportunities for shareholder value.
This morning’s news centers around a new deal between American International Group Inc (NYSE:AIG)‘s International Leasing Finance Corp, an aircraft leasing company, and Embraer, the world’s largest manufacturer of commercial jets up to 120 seats. ILFC has finalized an order for 50 new jets from Embraer, with the option for another 50 jets at a later time.
Though this headline isn’t anything exceptional for a jet leasing firm, the interesting twist comes from the fact that American International Group Inc (NYSE:AIG) has been trying to sell ILFC for the past few years and is currently waiting for a group of Chinese financial firms to close a signed deal for the operations for $4.2 billion. The Chinese consortium has already missed two deadlines, so investors and Wall Street are watching to see if the deal goes through after all.
American International Group Inc (NYSE:AIG)’s and ILFC’s management has already stated they are focused on getting the current deal closed, but are open to new deals or an IPO if it cannot be resolved. In the mean time, the purchase of new jets for the leasing company is in response to customer demand, signaling that management is still willing to make commitments that will help the company in the long term should the current deal fall through.
So why should investors care?
It may not seem like it, but the purchase of new jets for ILFC is just one more example of American International Group Inc (NYSE:AIG)‘s management’s focus on the long-term success of the company. Though there is a deadline for the sale of ILFC at the end of the month, ILFC’s current CEO, Henri Courpron, isn’t leaving it up to the buyers to satisfy customer needs if the deal does go through. Instead, moving forward with the purchase shows investors that the company is willing to spend the time and resources to keep the operations viable for the long term regardless of the sale.
AIG’s management as a whole has been displaying the same sort of resolve in other areas of the business, most notably with capital distributions.