Depreciation is often the single largest cost of owning an aircraft — larger than fuel. Here is how aircraft lose value over time, why classes differ, and what protects residual value.
Owners obsess over hourly operating cost, but over a typical ownership period the biggest number is usually depreciation — the value the aircraft sheds while you own it. Understanding the curve, and what bends it in your favour, is central to buying well.
The depreciation curve
Aircraft don't lose value in a straight line. Depreciation is steepest in the early years and flattens as the type matures, trending toward a residual "floor" rather than falling to zero. That shape is why the early years of a brand-new aircraft carry the largest paper losses, and why a well-chosen pre-owned aircraft can be far kinder to the balance sheet.
Why classes differ
As a pattern, turboprops and pistons tend to retain a higher share of their value over time, with higher residual floors, while jets carry larger absolute depreciation simply because the values involved are much higher. We set out the indicative retention curves by class in our aircraft value retention report.
What protects residual value
- Hours and condition — a low-time, well-maintained example holds value better than a high-time or tired one.
- Maintenance-programme status — enrolment in engine/airframe hourly cost programmes is prized by buyers and lenders.
- Damage-free history and complete logbooks — gaps or prior damage discount value and slow a sale.
- Current avionics and mandates — an aircraft compliant with airspace requirements avoids a looming upgrade bill for the next buyer.
- A popular, well-supported type — deeper demand and a healthier pre-owned market firm up resale.
Put a number on it
The market cycle moves everything at once
Individual aircraft depreciate, but the whole market also rises and falls. Periods of strong demand and thin inventory lift values across the board, while downturns push them down regardless of how well a particular aircraft has been kept. This matters for owners because the timing of a sale can affect the outcome as much as the condition of the aircraft, and because residual value assumptions made at the top of a cycle tend to disappoint.
Production status and manufacturer support
One of the strongest predictors of a long-term residual floor is whether the type remains in production and properly supported. An aircraft whose manufacturer still builds it, publishes service information and supplies parts has a deep, liquid market. When a type goes out of production, or a manufacturer exits or changes hands, parts and support become harder to secure and values usually reflect that — sometimes sharply.
Obsolescence is a real depreciation driver
Regulatory and equipment mandates quietly reprice aircraft. When a new avionics or surveillance requirement arrives, aircraft already compliant hold value while those needing an expensive retrofit are discounted by roughly the cost of the work, and often more, because buyers dislike inheriting a project. Anticipating the next mandate cycle is part of buying for residual value.
Fleet size and liquidity
A type with many examples flying and an active pre-owned market is easier to value, finance, insure and eventually sell. Rare types can be excellent aircraft and still be difficult to exit, because the pool of qualified buyers is small and each sale takes longer. If you may need to sell within a defined window, liquidity deserves as much weight as specification.
Buying with residual value in mind
Several choices at purchase compound over an ownership period: choosing a mainstream, well-supported type; buying an example with complete records and no unexplained damage history; enrolling engines and airframe on recognised hourly cost programmes and keeping them current; keeping the specification conventional rather than idiosyncratic; and avoiding deferred maintenance that the next inspection will surface anyway. None of these are glamorous, and together they explain most of the spread between a good and a poor resale outcome.
Do not confuse market value with tax depreciation
Market depreciation is what the aircraft is worth to a buyer. Tax depreciation is a schedule set by tax rules for offsetting income, and the two can differ substantially. Owners sometimes assume a favourable tax treatment implies the asset is holding value, or the reverse. They are separate questions and should be modelled separately, with tax advice specific to your jurisdiction and use.
To estimate what a specific aircraft is worth today — and how it depreciates from here — use the free aircraft valuation calculator. And because depreciation also has tax dimensions for business owners, see our overview of aircraft tax and depreciation (and always confirm with a qualified adviser).
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