Aircraft Finance Market Outlook: Buy Now, or Pay the Price Later

Trends see both opportunities and challenges for buyers and lenders.

Keller Laseter

Wednesday, March 26, 2025 at 07:00 AM ET

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Edited By:

Ryan Ewing

Pilatus PC-12 [Courtesy: Pilatus Aircraft]

Key Takeaways:

The aircraft finance market in 2025 is experiencing strong demand, particularly in the owner-flown segment (high-end pistons and turboprops), fueled by dropping borrowing costs and buyers upgrading from older, higher-maintenance aircraft.
Interest rates for aircraft loans have significantly decreased to the high 6 percent range, reflecting a broader economic trend of falling borrowing costs across various asset classes.
Constrained availability of newer aircraft, coupled with the potential return of 100 percent bonus depreciation, is driving up prices and intensifying competition among buyers.
Financing terms remain generally favorable with average loan-to-value ratios of 80-85% over 15-20 years, though flight school aircraft face higher rates and increased down payment requirements.

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As we settle into 2025, the aircraft finance market continues to evolve, presenting both opportunities and challenges for buyers and lenders alike. Costs to borrow are dropping across asset classes in the U.S. economy, stimulating demand for everything from homes to cars and aircraft.

The bottom line is that banks are competing more aggressively for borrowers’ business, which is great for aircraft buyers. This month, we’re seeing some interesting trends emerge, particularly in the owner-flown segment encompassing high-end pistons and turboprops.