How Aircraft Sale-Leasebacks Work
In an aircraft sale-leaseback, an operator sells an aircraft it owns to a lessor and immediately leases it back. The aircraft keeps flying, any existing loan is paid off from the sale, and the remaining proceeds become cash for growth.
Key takeaways
- The aircraft never leaves your operation.
- Cash released equals sale proceeds minus your existing loan.
- The trade-off is a new monthly lease payment and the loss of future resale value.
- It works best when the cash earns more than the lease costs.
How does a sale-leaseback work, step by step?
- The lessor appraises the aircraft and offers a purchase price.
- At closing, the lessor buys the aircraft and pays off any existing loan.
- You receive the remaining proceeds.
- On the same day, you sign a lease and keep operating the aircraft.
Example: one owned trainer
These figures are hypothetical. Try your own in the sale-leaseback calculator.
Is a sale-leaseback the same as a flight school leaseback?
No. In a flight school leaseback, a private owner keeps the aircraft and leases it to a school or club to offset ownership costs. In a sale-leaseback, the operator sells the aircraft to a lessor and becomes the lessee. The names are similar, the deals are not.
When does a sale-leaseback make sense?
- You own aircraft with meaningful equity and need capital for growth
- Lenders will not advance enough on a traditional loan
- You want to replace costly short-term debt
- You prefer a predictable lease cost to ownership risk
What should you watch for?
Read the lease as carefully as the purchase price: hour limits, maintenance reserves, return conditions and any repurchase option. Compare the total lease cost over the term with what the released cash will earn.
Aircraft Sale-Leaseback Calculator
Cash released and the monthly lease that follows.
Frequently asked questions
Can I buy the aircraft back later?
Only if the lease includes a repurchase option. Negotiate it before closing.
Is a sale-leaseback taxable?
Selling an aircraft can trigger a taxable gain, especially if it has been depreciated. Ask your tax advisor before you sign.
Sources
This guide is educational and is not tax, legal or investment advice. See our editorial standards and disclosures. Spot an error? Tell us.
