MINNEAPOLIS (AP) - There was a time when buyers would have lined up for a chance to buy one of the world's largest aircraft owners.

But months after American International Group Inc. hung a "For Sale" sign on its aircraft leasing subsidiary International Lease Finance Corp., no deal has closed. AIG is trying to sell assets to repay the $60 billion federal loan that helped it avoid collapse this fall. But the same frozen credit markets that hurt AIG are making it hard to find a buyer for debt-laden ILFC and the planes it values at some $50 billion.

ILFC should be one of AIG's most attractive assets, in part because it has nothing to do with the troubled housing finance sector. Its 950 planes make up the world's second-largest fleet, behind only GE Commercial Aviation Services.

In the U.S., ILFC's customers include American Airlines, Delta Air Lines, JetBlue, and US Airways, although 90 percent of its business is done internationally. That has insulated it from the ups and downs of U.S. airlines. Its planes are locked into leases, giving it a steady revenue flow.

Most travelers don't care who owns a particular plane. But ILFC's fate is being closely watched in the aviation industry, in part because of what it says about lenders' appetite for airplanes, and in part because ILFC is the biggest buyer of Airbus planes and among the largest Boeing customers.

One key to ILFC's success has been its ability to borrow cheaply to buy all those planes - in part because of AIG's backing, said Fitch Ratings analysts William Artz and Christopher D. Wolfe. Indeed, ILFC's bank debt has a covenant that says it must be at least 51 percent owned by AIG. That brings the banks in as potential negotiators of a sale.

"If the buyer is weaker, they may have issues with it, and it may have some impact on the ability to sell ILFC," Artz said.

ILFC's debt stood at $35.72 billion as of Sept. 30, and it can't issue commercial paper because of AIG's problems, according to a filing with the Securities and Exchange Commission. Commercial paper is the short-term debt many companies issue to finance day-to-day expenses such as payroll.

ILFC has maxed out its revolving credit line, saying that money plus cash from operations will be enough for it to meet its debt payments "into the first quarter of 2009," a timeframe that is fast approaching.

ILFC is also required to make progress payments to aircraft manufacturers while planes on order are being built. As of Sept. 30 the company said it had committed to buy 174 new Airbus and Boeing planes for delivery through 2019, for about $16.9 billion.

AIG won't talk about the status of a sale or potential buyers of ILFC. But one of the leading contenders is Stephen Udvar-Hazy, co-founder and chief executive of the Los Angeles-based company, who has made public comments indicating that he is interested in being part of a buyout of the company he sold to AIG in 1990.

"Any deal involving ILFC will ultimately include in some capacity Steve Hazy," said Jon Kutler, a longtime aerospace investor who runs Los Angeles-based Admiralty Partners.

The aircraft finance business is enduring a combination of hyper-cautious lenders and aircraft prices that are bouncing around as fuel prices drive certain planes in and out of fashion. For instance, older 737s, one of the mainstays of the U.S. fleet, are being phased out entirely by United Airlines, although newer, more fuel-efficient versions are still popular.

"The volatility of aircraft values is plaguing the industry," said Bob Agnew, founder of aircraft valuation and consulting firm Morten Beyer & Agnew.

Ten airlines with 43 planes owned or managed by ILFC filed for bankruptcy protection in the past year. Some, such as ATA Airlines, stopped flying altogether, and ILFC said 30 of those planes were being returned. It found new users for most of them.

Moody's, which downgraded ILFC debt on Oct. 3, noted in a Dec. 11 report that ILFC has stayed profitable during previous economic downturns.

Still, Moody's fretted that airline defaults could mean more repossessions of planes, during a period when the company already has a large number of leases that are running out. That could raise costs, reduce yields on leases, and hurt ILFC profits, Moody's wrote.