How quickly does an aircraft lose value?

The rate at which an aircraft loses value can vary significantly based on several factors, including the aircraft’s age, make and model, total flight hours, maintenance history, market demand, and economic conditions. New aircraft typically experience their steepest depreciation in the first few years after purchase. This initial depreciation can be substantial, with values often dropping by 20% to 40% within the first few years. The age of the aircraft is a significant factor in determining depreciation. Older aircraft tend to depreciate at a slower rate, but the rate of depreciation can accelerate as the aircraft approaches the end of its useful life. The number of flight hours an aircraft has logged is an important factor. High-time aircraft tend to depreciate more rapidly, especially when they approach major maintenance events or overhauls. Market demand plays a critical role in aircraft depreciation. If there is strong demand for a particular make and model, it can mitigate depreciation. Conversely, if there is a surplus of similar aircraft on the market, it can lead to faster depreciation. Well-maintained aircraft with modern avionics and interior renovations tend to depreciate at a slower rate. Buyers are often willing to pay a premium for aircraft in good condition. Economic factors, including inflation, interest rates, and the overall economic health of the aviation industry, can influence the rate of depreciation. During economic downturns, aircraft values may depreciate more rapidly. Different types of aircraft depreciate at varying rates. For example, small single-engine piston aircraft may experience slower depreciation compared to large commercial jets. Regulatory changes, such as the introduction of new safety or environmental requirements, can impact the value of older aircraft that may not meet the latest standards. Aircraft depreciation can also vary by region. In some markets, such as emerging aviation markets, certain aircraft may depreciate more slowly due to strong demand. It’s important to note that while aircraft values depreciate over time, this depreciation is not linear. The rate of depreciation can vary at different stages of an aircraft’s life. Generally, depreciation tends to slow down as the aircraft gets older and approaches a stable residual value. To assess the depreciation of a specific aircraft, it is advisable to consult with aviation professionals, appraisers, or industry experts who can provide insights into the current market conditions and the expected depreciation for that particular make and model.