When you’re evaluating an aircraft purchase, one of the most important questions you can answer is also one of the simplest: How many hours will this aircraft fly each year?
That single number influences how lenders assess risk, how they structure your loan, and ultimately what your financing terms look like. Whether the aircraft will be flying hard as part of a charter operation or serving occasional executive missions, your projected utilization plays a major role in shaping the economics of your deal.
At The Aircraft Lenders, we help clients every day navigate how flight hours—and the operational realities behind them—translate to lending decisions. Here’s what you should know.
Why Usage Frequency Matters
Aircraft financing is all about understanding risk over time. How often an aircraft flies affects:
- Its wear and tear
- Its maintenance schedule
- Its long-term value
- Its operating costs
- Its resale prospects
Because of this, lenders pay close attention to utilization when tailoring financing structures. It’s not a matter of “more flying is bad” or “less flying is safer”—each usage profile simply comes with a different risk picture.
How Lenders Evaluate Frequently-Flown Aircraft
An aircraft flying several hundred hours a year—common with charter operators, corporate flight departments, and airline feeders—tends to see faster depreciation and more frequent maintenance events. That doesn’t make the operation unattractive; it just means financing terms need to match the reality of the asset.
Here’s how heavy usage can influence those terms:
- Shorter Loan Terms
Higher utilization means faster depreciation, so lenders often recommend shorter amortization periods to reduce long-term exposure.
- Lower LTV (Loan-to-Value)
When projected flying time is above average, lenders may want borrowers to put down a higher down payment.
- Slightly Higher Rates
Aircraft that fly a lot may carry more variability in maintenance and residual value. Rates may be adjusted to reflect that added risk.
- Tighter Maintenance Requirements
Lenders may require more detailed reporting, predictable inspection schedules, or specific maintenance program participation.
- Additional Collateral in Some Cases
If projected usage is especially high, lenders may reserve the right to request additional collateral or stronger guarantees.
Examples:
Commercial operators, charter companies, and high-demand corporate fleets typically fall into this category. They undergo closer operational review and often carry more frequent reporting requirements—but also benefit from lenders who understand high-utilization operations.
Financing Advantages for Low-Utilization Aircraft
On the other end of the spectrum are aircraft that fly fewer annual hours: executive jets used for occasional travel, personal aircraft, or planes serving a narrow mission profile. These aircraft may show slower depreciation and cleaner maintenance histories.
For these aircraft, borrowers may see:
- Longer Amortization Options
With lower wear, lenders are more comfortable stretching loan terms.
- More Competitive Rates
Predictable usage and pristine logbooks help keep risk low.
- Flexible Repayment Structures
When usage is modest, operators sometimes qualify for seasonal or customized payment schedules.
Choosing the Right Financing Partner
Aircraft financing is highly specialized. Working with lenders who understand aviation—not just general equipment finance—can make the difference between a structure that fits your operation and one that restricts it.
When you’re evaluating financing:
- Be accurate about expected flight hours.
Over- or under-estimating can lead to terms that don’t support your mission profile. - Work with aviation-focused lenders.
They understand maintenance cycles, depreciation curves, and operational realities. - Keep maintenance proactive.
Strong maintenance practices preserve value and strengthen your negotiating position. - Track the market.
Aircraft values and interest rates shift—staying informed helps ensure your terms remain competitive.
At The Aircraft Lenders, we build each financing structure around how the aircraft will actually be used—not how it looks on paper. That ensures alignment between your operational needs and your long-term financial strategy.
