How Aircraft Depreciation Works and What It Means for Buyers
Aircraft depreciation is the largest financial factor in private aviation ownership, yet it is frequently overlooked during the excitement of an acquisition. Understanding how and why aircraft lose value helps buyers choose the right model, negotiate a fair price, and plan a realistic exit strategy.
The Depreciation Curve
New business jets typically depreciate fastest in their first five years, losing 20 to 35 percent of their delivery value depending on the type. The rate of decline then moderates, with most jets losing an additional 5 to 10 percent per year through years five to fifteen. After fifteen years, depreciation slows further and the aircraft approaches a residual floor where market value stabilises.
This curve is not linear, and it is not identical across all aircraft types. Models with strong demand, limited production, and good manufacturer support depreciate more slowly. Types that are out of production, have expensive maintenance events approaching, or lack a robust parts supply depreciate faster.
What Drives Residual Value
Several factors determine where a specific aircraft sits on the depreciation curve:
Production status. Aircraft still in production benefit from ongoing manufacturer investment in parts, service bulletins, and customer support. When a manufacturer discontinues a type, parts availability eventually tightens and maintenance costs rise, accelerating depreciation.
Engine programme enrolment. Jets enrolled in hourly engine programmes such as Rolls Royce CorporateCare or Pratt and Whitney Eagle retain significantly more value than those outside such programmes. Programme coverage gives the next buyer certainty about future engine costs, which directly supports the asking price.
Total time and cycles. Lower airframe hours and landing cycles generally correlate with higher residual values, though the relationship is not strictly proportional. An aircraft with 3,000 hours and complete records can be worth more than one with 2,000 hours and documentation gaps.
Maintenance history. Complete, unbroken logbooks with all scheduled inspections performed on time are essential. Aircraft with deferred maintenance items, incomplete records, or damage history trade at a discount that often exceeds the actual cost of the underlying issues.
Avionics generation. Cockpit and cabin technology ages faster than the airframe. Jets with current generation avionics and connectivity systems are more attractive to buyers than those requiring expensive upgrades to meet modern expectations or regulatory mandates.
Paint and interior condition. Cosmetic condition affects first impressions and is often used as a proxy for overall care. A recent paint and interior refresh can add several hundred thousand dollars to an aircraft's market value, though the investment does not always yield a full return.
Models That Hold Value Well
Certain aircraft types have historically demonstrated stronger residual values than their peers:
The Gulfstream G550 and G650 have maintained premium residual values thanks to strong demand from both private and corporate buyers, proven reliability, and Gulfstream's comprehensive customer support. Read our G550 buyer guide.
The Embraer Phenom 300 series benefits from being the market leader in the light jet segment. Consistent demand and a reputation for low operating costs support its resale values.
The Pilatus PC 12 holds value exceptionally well in the turboprop segment, driven by its versatility, single engine simplicity, and strong demand across multiple mission types. Read our PC 12 buyer guide.
Buying at the Right Point on the Curve
The steepest depreciation hits the original owner. Buyers of pre owned aircraft can benefit from this by acquiring jets that have already passed through their most aggressive depreciation phase. A ten year old midsize jet may cost 40 to 50 percent less than its original delivery price while still having years of useful service ahead.
However, buying too far down the curve introduces other risks. Older aircraft face more frequent inspections, potential parts obsolescence, and avionics compliance requirements that can be expensive to address. The sweet spot for value often lies between five and twelve years of age, where the initial depreciation has passed but the aircraft remains well supported.
Tax Considerations
In the United States, bonus depreciation and MACRS (Modified Accelerated Cost Recovery System) schedules allow aircraft owners to accelerate tax depreciation, sometimes writing off the full purchase price in the first year of ownership. These provisions can significantly alter the economic equation, particularly for buyers who use the aircraft for business purposes. Tax rules vary by jurisdiction and change frequently, so professional advice is essential.
Frequently Asked Questions
Do turboprops depreciate differently to jets?
Turboprops generally follow a similar curve but with lower absolute values. Some types, particularly the Pilatus PC 12 and Beechcraft King Air 350, have demonstrated remarkably strong residual values relative to their acquisition cost.
How can I estimate an aircraft's current market value?
Published valuation services such as Vref and Aircraft Bluebook provide baseline figures. For a more accurate assessment, consult an experienced broker who can factor in current market conditions, specific aircraft configuration, and recent comparable sales. Browse current aircraft listings to see asking prices for similar types.
