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.
The demand for private aircraft remains robust, driven by a combination of factors, including the ongoing recovery in corporate travel and a desire for greater operational flexibility. However, the market is not without its complexities. Let’s dive into the current landscape and what it means for potential aircraft buyers.
The high-end piston and turboprop market, popular among owner-pilots, is experiencing particularly interesting dynamics. Demand remains strong, driven by both experienced pilots looking to upgrade and newcomers entering the world of aircraft ownership. This segment has seen a notable influx of first-time buyers who, having entered the market in the immediate post-pandemic period, are now looking to upgrade or replace their initial purchases.
As some first-time buyers opted for older models due to their lower initial costs, they now face significant maintenance needs. This has prompted them to consider newer models, impacting both new and pre-owned aircraft sales across the market.
The availability of newer aircraft remains constrained, a trend anticipated to persist throughout 2025. This scarcity is driving prices upward and impacting financing conditions. Moreover, President Donald Trump’s administration has hinted at restoring the 100 percent bonus depreciation, which could further stimulate demand. Buyers targeting these sought-after models may face heightened competition, necessitating swift decision making and thorough readiness to secure advantageous financing arrangements. Waiting could cost you thousands when demand hits its peak.
For those considering financing options in the aircraft market, interest rates for owners of piston-powered aircraft, turboprops, and jets are currently in the high 6 percent range. This is a lower rate than last year by about 115 basis points, making it a compelling time for potential buyers. These competitive rates can vary based on factors such as the borrower’s credit profile, the aircraft’s age, and its intended use—be it for personal enjoyment or business operations.
