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

Verified

Edited By:

Ryan Ewing

Pilatus PC-12 [Courtesy: Pilatus Aircraft]

Key Takeaways:

Aircraft financing costs are dropping to the high 6% range in 2025, reflecting broader economic trends of falling interest rates and increased bank competition, creating a favorable market for buyers.
Demand for private aircraft, particularly in the owner-flown segment (high-end pistons and turboprops), remains strong, driven by first-time buyers looking to upgrade; however, limited supply of newer aircraft is driving up prices and competition.
Loan terms offer significant leverage with average loan-to-value ratios of 80-85% and 15-20 year durations, though aircraft used for flight schools face higher interest rates and down payment requirements due to increased risk.

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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.