Commercial Aviation Refinance UK

Refinancing existing commercial aviation debt - or releasing equity from aircraft you own outright - can be a powerful tool for commercial operators seeking to optimise their capital structure, fund fleet expansion or improve working capital. Commercial aviation refinance covers several distinct strategies, each with different mechanics, costs and implications.

Equity release refinancing allows operators who have paid down their aviation finance (or own aircraft outright) to borrow against the asset's current market value. This releases cash that can be used for fleet expansion, maintenance reserve funding, working capital or business development. The facility is secured against the aircraft and typically assessed on the same criteria as a new acquisition finance.

Sale-and-leaseback involves selling an owned aircraft to a lessor (which may be a bank, specialist aviation lessor or structured vehicle) and immediately taking it back on lease. This converts a capital asset into a stream of lease payments, releasing the full aircraft value as cash. Sale-and-leaseback is widely used in commercial aviation to optimise capital allocation and reduce balance sheet leverage.

Debt restructuring may be appropriate where existing aviation finance is at above-market rates, has an unsuitable term, or includes restrictive covenants. Refinancing onto better terms requires a lender willing to replace the incumbent, which means understanding the breakage costs and prepayment terms of the existing facility before committing to refinance.

DBF assesses commercial aviation refinance requirements on a case-by-case basis, considering the existing facility terms, the aircraft's current market value, the operator's covenant, and the range of refinancing options available. We will only recommend refinancing where the financial case is clear.

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