Aircastle : Announces Second Quarter 2016 Results Declared Third Quarter 2016 Dividend of $0.24 per Common Share Celebrates 10th Anniversary of Initial Public Offering

Contact:

Aircastle Advisor LLC The IGB Group

Frank Constantinople, SVP Investor Relations Leon Berman

Tel: +1-203-504-1063 Tel: +1-212-477-8438

fconstantinople@aircastle.com lberman@igbir.com

• Total revenues were $190.0 million for the second quarter of 2016

• Total lease rental and finance and sales-type lease revenues were $180.3 million

• Net income was $20.0 million, or $0.25 per diluted common share

• Adjusted net income was $24.2 million, or $0.31 per diluted common share

• Adjusted EBITDA was $182.4 million for the second quarter

• Cash ROE was 14.0%; net cash interest margin was 8.5%

  Highlights

• Acquired nineteen aircraft for $560 million during the quarter

• Obtained $1.1 billion in new financing year-to-date, including a $400 million term loan facility closed during the second quarter

• Signed leases for three new 737-800s and three Embraer E2 aircraft from our order stream

• Continued de-risking our business by selling two older freighters

• Completed our annual recoverability analysis for freighter and wide-body aircraft, and reduced the carrying value of an older wide-body

• Declared our 41st consecutive quarterly dividend

  Stamford, CT. August 4, 2016 - Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported second quarter 2016 net income of $20.0 million, or $0.25 per diluted common share and adjusted net income of $24.2 million, or $0.31 per diluted common share. The second quarter results included total lease rental and finance and sales-type lease revenues of $180.3 million, a decrease of 3%, as compared to $186.7 million in the second quarter of 2015.

  Note: Non-GAAP items reconciled in the Appendix.

  Commenting on the results, Ron Wainshal, Aircastle's CEO, stated "We mark the ten year anniversary of Aircastle's initial public offering with yet another successful quarter, noting that we've built an aircraft portfolio that is worth nearly four and half times more today and has delivered excellent performance along the way. We've also created a truly unique and relevant company that is both the world's largest aircraft value investor and one that is positioned to prosper and grow both in stable and turbulent times."

  Mr. Wainshal continued, "Thanks to our talented team, supportive partners and our conservative and flexible capital structure, we are seizing on prime investment opportunities arising from the heightened volatility we see in the world today. Our reliability as a trading partner allowed us to purchase $660 million in aircraft during the first half of the year and our strong investment pipeline gives us confidence that we'll exceed last year's $1.4 billion in acquisitions. At the same time our strength and agility as a borrower enabled us to raise $1.1 billion of attractively priced debt capital in moments when the market was favorable."

  Concluding, Mr. Wainshal added, "By limiting our long-term capital commitments, maintaining our financial flexibility and continuing to de-risk our portfolio, we are in a very strong position today. Aircastle is continuing to grow profitably, consistently originating investments with attractive returns despite the extremely low yield environment and competition for new business. We are also building on our track record of sharing profits with our shareholders by declaring our 41st consecutive quarterly dividend."

  (in thousands, except share data)	Three Months Ended June 30,		Six Months Ended June 30,
  2016	2015	2016	2015
  Total Revenues ..............................................................	$ 189,988	$ 204,565	$ 373,653	$ 398,861
  Lease Rental and Finance and Sales-Type Lease Revenues........................................................................	$ 180,299	$ 186,716	$ 363,367	$ 365,469
  Adjusted EBITDA .........................................................	$ 182,436	$ 214,608	$ 366,315	$ 404,822
  Net income.....................................................................	$ 20,030	$ 41,808	$ 56,292	$ 85,077
  Per common share - Diluted ....................................	$ 0.25	$ 0.51	$ 0.71	$ 1.05
  Adjusted net income ......................................................	$ 24,205	$ 47,229	$ 68,296	$ 97,686
  Per common share - Diluted ....................................	$ 0.31	$ 0.58	$ 0.86	$ 1.20

  Financial Results Second Quarter Results

  Total revenues were $190.0 million, a decrease of $14.6 million, or 7% from the previous year. A decrease of $8.8 million in maintenance revenues and a $6.4 million drop in lease rental and finance and sales-type lease revenue accounted for most of the change. During the second quarter of 2015, we recorded $21.3 million of maintenance revenue, primarily due to the expiration of four leases with significant return compensation payments. The decline in lease rental and finance lease revenue was due to the sale of 43 aircraft since the second quarter of 2015.

  During the second quarter, we agreed to sell two 25-year old 747-400 freighters scheduled to come off lease within the next twelve months and recorded an impairment charge of $5.1 million. Both aircraft were sold in July.

  We completed our annual fleet review for wide-body and freighter aircraft during the second quarter this year given weaker market dynamics for these aircraft. In connection with this review, we recorded impairment charges of $11.7 million and maintenance revenue of $4.0 million related to one sixteen-year old A330-200 approaching lease expiry. We will perform our annual fleet review for narrow-body aircraft in the third quarter.

  Adjusted EBITDA for the second quarter was $182.4 million, down $32.2 million, or 15% from the second quarter of 2015, mostly due to lower revenues of $14.6 million and lower gains from the sale of flight equipment of $18.9 million.

  Net income in the second quarter was $20.0 million, down 52%, or $21.8 million. The decrease was primarily due to lower revenues of $14.6 million and lower gain on sale of $18.9 million, partially offset by lower aircraft impairment charges of $7.2 million and lower depreciation and taxes of $4.4 million.

  Adjusted net income for the quarter was $24.2 million, down $23.0 million compared to the prior year period. The decrease was primarily due to lower revenues of $14.6 million, and lower gain on sale of

  $18.9 million, partially offset by lower aircraft impairment charges of $7.2 million.

  Aviation Assets

  During the second quarter of 2016, we acquired nineteen aircraft for approximately $560 million. In the first half of 2016, we acquired a total of 22 aircraft for $660 million. These aircraft have a weighted average remaining lease term of 5.7 years. Narrow-body aircraft comprise all but three of this total, with the remainder being wide-body aircraft assumed to be on last leases.

  During the second quarter we executed leases with two customers in China for three Boeing 737-800 aircraft acquired new upon delivery from the manufacturer. These aircraft had been part of a Brazilian airline's order stream and were purchased on spec. We expect to deliver all three of these aircraft on lease before the end of the third quarter. We also signed leases with Azul, a Brazilian airline, for three Embraer E2 E195 aircraft from our order stream.

  During the first half of 2016, we sold fourteen aircraft and other flight equipment for proceeds of approximately $340 million and recorded a gain on sale of $15.0 million. The aircraft sold consisted of two A330s, one 777-200 and six A320s sold to third parties. In addition five newer A320s were sold to our joint ventures with Ontario Teachers' Pension Plan and IBJ Leasing. The weighted average age of the aircraft sold, excluding sales to our joint ventures, was approximately eleven years.

  As of June 30, 2016, Aircastle owned and managed 179 aircraft with a net book value of $6.8 billion. Of this total, 169 aircraft having a net book value of $6.2 billion are owned, while we manage an additional ten aircraft with a net book value of approximately $612 million dollars on behalf of our joint ventures with Ontario Teachers' and IBJ Leasing.

  Owned Aircraft	As of June 30, 2016(1)	As of June 30, 2015(1)
  Total Flight Equipment Held for Lease ($ mils.)	$	6,168	$	6,076
  Unencumbered Flight Equipment Held for Lease ($ mils.)	$	4,499	$	3,705
  Number of Aircraft	169	161
  Number of Unencumbered Aircraft(2)	142	110
  Weighted Average Fleet Age (years)(3)	7.7	8.0
  Weighted Average Remaining Lease Term (years)(4)	5.5	5.8
  Weighted Average Fleet Utilization for the period ended(5)	99.0%	99.1%
  Portfolio Yield for the year ended(6)	12.4%	12.6%
  Net Cash Interest Margin(7)	8.5%	9.1%

• Calculated using net book value of flight equipment held for lease and net investment in finance and sales-type leases at period end.

• The second quarter of 2016 includes ten aircraft with a net book value of $318.6 million that will secure our ACS 2016 Bank Financing.

• Weighted average age by net book value.

• Weighted average remaining lease term by net book value.

• Aircraft on-lease days as a percent of total days in period weighted by net book value.

• Lease rental revenue for the period as a percent of the average net book value of flight equipment held for lease for the period; quarterly information is annualized.

• Net Cash Interest Margin = Lease rental yield minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities / average NBV of flight equipment for the period calculated on a quarterly basis, annualized.

Year-to-date, we've secured $1.1 billion of new financing. During the second quarter of 2016, we closed a $400 million term financing secured by seventeen aircraft, marking our return to the secured bank financing market. This financing can be enlarged by approximately $68 million by including two additional aircraft as collateral. We also prepaid our Securitization No. 2 in May which freed up approximately $500 million in collateral, further enhancing the Company's financial position.

On August 2, 2016, Aircastle's Board of Directors declared a third quarter 2016 cash dividend on its common shares of $0.24 per share, payable on September 15, 2016 to shareholders of record on August 26, 2016. This is our 41st consecutive dividend. In addition, since the beginning of this year we repurchased 1.8 million shares at an average cost of $18.84, including 176,574 shares purchased during June and July for an average cost of $18.92 per share.

In connection with this earnings release, management will host an earnings conference call on Thursday, August 4, 2016 at 10:00 A.M. Eastern time. All interested parties are welcome to participate on the live call. The conference call can be accessed by dialing (888) 430-8709 (from within the U.S. and Canada) or (719) 325-2323 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "8881544".

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.aircastle.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for one