Depreciation

Depreciation is the reduction in an aircraft's value over time as it ages and accumulates hours. It's both an economic reality (captured in residual value) and, for business-use aircraft, an accounting and tax concept — depreciation schedules can offset income, subject to the applicable rules. Always confirm the tax treatment with a qualified advisor.

Why it matters: over a typical ownership period, depreciation — the value the aircraft sheds while you own it — is usually the largest single cost, bigger than fuel. It is invisible month to month and decisive at exit, which is why sophisticated buyers model it and casual buyers are surprised by it.

Keep two meanings separate: market depreciation is what buyers will pay; tax depreciation is a statutory schedule for offsetting income, and the two can diverge widely. Aircraft do not depreciate linearly either — the curve is steepest early and flattens toward a residual floor, which is why well-chosen pre-owned aircraft can be far kinder to the balance sheet than new ones.