Aircraft leasing: lease, buy or leaseback?

The short answer: leasing an aircraft means paying a lessor to use an aircraft it owns. For private and business aircraft, the choices come down to three ways of having an aircraft: lease it (no equity, capital preserved, the lessor keeps title), buy it, usually with a loan (equity, control and depreciation, plus the residual value risk), or own it through a leaseback (you buy it and lease it to a charter operator, whose charter revenue offsets part of the cost). If what you want is a crewed jet rather than an aircraft to run, charter or a jet card from a certificated operator does that without a lease at all.

How an aircraft lease works

The lessor owns the aircraft and the lessee pays to use it for an agreed period. There are two financial kinds of lease:

• Operating lease. You use the aircraft and return it at the end. Textron Aviation describes it as building no equity, with the lessor on title. The lessor carries the residual value: what the aircraft is worth at the end.
• Finance (capital) lease. Structured so you effectively acquire the aircraft over the lease, often with a purchase option at the end. Economically it behaves much like a loan.

Some banks offer both loans and operating leases: M&T Bank's aircraft unit, for example, lists term loans and operating leases among its products (aircraft lenders directory). A common belief is that leasing needs less money up front; Textron calls that a common misconception, because leases often carry deposits or advance payments.

Dry lease or wet lease: the FAA side

Separate from the financial structure is a regulatory one, and it matters more for private aircraft than most people expect.

• A dry lease is an aircraft leased with no crew. You, as lessee, take operational control: the FAA's term for the authority over initiating, conducting and ending a flight. You hire qualified pilots, keep the aircraft airworthy and fly under Part 91 for your own purposes. For large aircraft, 14 CFR 91.23 requires a truth-in-leasing clause and filings with the FAA.
• A wet lease provides an entire aircraft and at least one crewmember. For compensation, that is air transportation, which needs an FAA certificate such as Part 135. A wet lease from someone without one, including the "sham dry lease" where aircraft and pilot come on separate contracts, is the classic illegal charter.

We cover the rules, the paperwork and the risks in detail in wet lease vs dry lease.

Lease vs buy vs leaseback

Simplified. The tax lines depend on the structure and your facts: confirm them with a tax adviser. Down payment ranges: AOPA Aviation Finance, jet purchases.

When leasing fits

Leasing suits operators and companies that want an aircraft for a defined period, prefer to keep capital elsewhere, or don't want to carry the risk of what the aircraft will be worth in a few years. It still leaves you responsible for running the aircraft in a dry lease, so it suits those with a flight department or a management company.

When buying fits

Buying, usually with a loan, suits someone who will fly enough to justify the fixed costs and wants control of the aircraft and its tax position. Model the payment in the aircraft loan calculator, and see what lenders will check in aircraft financing. Our ownership cost pages show the fixed and variable costs for more than 70 models.

When a leaseback fits

A leaseback suits an owner whose aircraft would otherwise sit between trips. The aircraft is leased to a certificated operator, flies charter, and the revenue goes toward costs such as crew, hangar and insurance, while the owner keeps ownership and its tax position. In a CRAFT leaseback, Challenger 300 and 350 owners put their aircraft on our Part 135 certificate, and we carry crew, maintenance and compliance. If the aircraft is financed, the lender needs to approve the charter use.

If you want the flying, not the aircraft

Leasing a jet with crew from someone who isn't a certificated operator isn't a legal shortcut to private flying. The routes that are:

• Charter: pay per trip on a certificated operator's aircraft. Price a CRAFT charter.
• A jet card: prepaid hours at published rates. The Fleet Jet Card flies CRAFT's own Challengers.
• Fractional ownership: a share of an aircraft in a managed program, covered in how fractional ownership works.

Sources

• Textron Aviation, financing a private aircraft 101
• eCFR: 14 CFR 1.1 (wet lease, operational control), 14 CFR 91.23 (truth-in-leasing)
• FAA, Safe Air Charter: pilots, owners and operators
• AOPA Aviation Finance, exploring aircraft financing options for jet purchases (February 1, 2025)
• M&T Capital and Leasing, aircraft

All checked October 11, 2026.