Prospectus Summary

This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the section entitled ‘‘Risk Factors’’ and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision to purchase common shares. Unless the context suggests otherwise, references in this prospectus to ‘‘Aircastle,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to Aircastle Limited and its subsidiaries. References in this prospectus to ‘‘AL’’ refer only to Aircastle Limited. References in this prospectus to ‘‘Aircastle Bermuda’’ refer to Aircastle Holding Corporation Limited and its subsidiaries. References in this prospectus to ‘‘Fortress’’ refer to Fortress Investment Group LLC, affiliates of which manage the Fortress shareholders, and certain of its affiliates and references to the ‘‘Fortress shareholders’’ refer to AL shareholders which are affiliates of Fortress. Throughout this prospectus, when we refer to our aircraft, we include aircraft that we have transferred into grantor trusts or similar entities, for purposes of financing such assets through securitization. These grantor trusts or similar entities are consolidated for purposes of our financial statements. All amounts in this prospectus are expressed in U.S. dollars and the financial statements have been prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’).

Aircastle Limited

We are a global company that acquires and leases high-utility commercial jet aircraft to passenger and cargo airlines throughout the world. High-utility aircraft are generally modern, operationally efficient jets with a large operator base and long useful lives. As of March 31, 2006, our aircraft portfolio consisted of 42 aircraft that were leased to 24 lessees located in 16 countries and managed through our offices in the United States, Ireland and Singapore. All of our aircraft are subject to net operating leases whereby the lessee is generally responsible for maintaining the aircraft and paying operational and insurance costs although, in a majority of cases, we are obligated to pay a portion of specified maintenance or modification costs. We also make investments in other aviation assets, including debt securities secured by commercial jet aircraft. As of July 18, 2006, we had acquired and committed to acquire aviation assets having an aggregate purchase price equal to $1.3 billion and $305.3 million, respectively, for a total of approximately $1.6 billion. In addition, as of July 18, 2006, we have entered into non-binding letters of intent to acquire an additional 8 aircraft subject to lease. These letters of intent will not become binding commitments for us or the seller until internal approvals, due diligence and certain other steps are completed. Our revenues and income from continuing operations for the quarter ended March 31, 2006 were $33.0 million and $7.8 million, respectively.

We expect to benefit from the size and growth of the commercial aircraft market and to increase our revenues and earnings by acquiring additional aviation assets. The current worldwide commercial aircraft fleet consists of more than 17,000 aircraft with an aggregate estimated value in excess of $330 billion and is expected to grow at a compound annual growth rate of 6.1% through 2015. The market is highly fragmented, with over 1,800 owners. Operating lessors, including us, own approximately 30.1% of the global fleet. The continued growth in air traffic, driven in large part by emerging markets with strong economic growth and rising levels of per capita air travel, has increased the demand, and lease rates, for certain high-utility aircraft types.

We intend to pay regular quarterly dividends to our shareholders. We plan to grow our dividends per share through the acquisition of additional aviation assets using cash on hand and available credit facilities. We expect to finance our acquisitions on a long-term basis using low-cost, non-recourse securitizations. Securitizations allow companies to raise long-term capital by

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pledging cash flows of an asset pool, such as aircraft leases. In June 2006, we closed our first securitization, a $560 million transaction comprising 40 aircraft, which we refer to as Securitization No. 1. On July 20, 2006, our board of directors declared a dividend of $0.35 per common share for the three months ended June 30, 2006, which is payable on July 31, 2006. In addition, our board of directors is expected to declare a dividend of $0.175 per common share to shareholders of record as of August 1, 2006, which is payable on August 15, 2006, for the period commencing on July 1, 2006 and ending on August 15, 2006. We are paying this dividend so that holders of our common shares prior to this offering will receive a distribution for the period prior to this offering. These dividends may not be indicative of the amount of any future dividends.

Competitive Strengths

We believe that the following competitive strengths will allow us to capitalize on the growth opportunities in the global aviation industry:

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Diversified portfolio of high-utility aircraft.    We have a portfolio of 42 high-utility aircraft, as of March 31, 2006, that is diversified with respect to geographic markets, lease maturities and aircraft type. Our lease expirations are well dispersed, with a weighted average remaining lease term of 4.2 years at March 31, 2006, and only six of our aircraft require re-deployment within the next 12 months. We believe that our focus on portfolio diversification reduces the risks associated with lessee defaults and any adverse geopolitical or economic issues and results in generally predictable cash flows.

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Disciplined acquisition approach and broad sourcing network.    We evaluate the risk-adjusted return of any potential acquisition first as a discrete investment and then from a portfolio management perspective. To evaluate potential acquisitions, we employ a rigorous due diligence process focused on: (i) cash flow generation with careful consideration of macro trends, industry cyclicality and product life cycles; (ii) aircraft specifications and maintenance condition; (iii) when applicable, lessee credit worthiness and the local jurisdiction's rules for enforcing a lessor's rights; and (iv) legal and tax implications. We source our acquisitions through well-established relationships with airlines, other aircraft lessors, financial institutions and other aircraft owners.

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Scaleable business platform.    We operate globally through offices in the United States, Ireland and Singapore, using a modern asset management system designed specifically for aircraft operating lessors and capable of handling a significantly larger aircraft portfolio. We believe that our facilities, systems and personnel currently in place are capable of supporting an increase in our revenue base and asset base without a proportional increase in overhead costs.

•	Experienced management team with significant technical expertise.    Our management team has significant experience in the acquisition, leasing, financing, technical management, restructuring/repossession and sale of aviation assets.

•	Innovative long-term debt financing structure.    We closed Securitization No. 1 on June 15, 2006. We have structured the securitization to provide for the release to us during the first five years of the cash flows attributable to the underlying aircraft after payment of expenses, interest and scheduled principal payments.

Growth Strategy

We plan to grow our business and increase our dividends per share by employing the following business strategies:

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Selectively acquire commercial jet aircraft and other aviation assets.    We believe the large and growing aircraft market provides significant acquisition opportunities. We plan to leverage our experience to make opportunistic acquisitions of other asset-backed aviation assets, including debt securities secured by aviation assets and other non-aircraft aviation assets. As of July 18, 2006, we had acquired or committed to acquire approximately $1.6 billion in aviation assets in 34 separate transactions.

•	Reinvest amounts approximately equal to non-cash depreciation expense in additional aviation assets.    Through our strategy of reinvesting amounts approximately equal to non-cash depreciation expense, we will seek to maintain our asset base and grow our dividends.

•	Maintain an efficient capital structure.    We expect to finance acquisitions on a long-term basis using aircraft lease portfolio securitizations. We believe that our long-term debt structure and dividend payment strategy result in a low cost of capital and a high degree of financial flexibility, allowing us to grow our business and dividends.

Industry Trends

The following industry dynamics create a favorable environment in which to expand our business, including:

•	Large and growing commercial aircraft fleet.     The current worldwide commercial aircraft fleet consists of more than 17,000 aircraft with an aggregate estimated value in excess of $330 billion. According to The Airline Monitor, the worldwide commercial aircraft fleet is expected to increase to approximately 23,000 aircraft by 2015.

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Increasing use of operating leases.    The high cost of aircraft fleet renewal and expansion, and the competitive environment of the commercial airline industry have led many airlines to outsource aircraft ownership to operating lessors like us. Over the last ten years, the percentage of the global commercial aircraft fleet owned by operating lessors increased from 17.6% to 30.1%, while the percentage owned by airlines declined from 55.5% to 48.4%. Operating leasing is an attractive alternative to ownership for airlines because leasing (i) increases fleet flexibility, (ii) requires a lower capital commitment and (iii) significantly reduces aircraft residual value risk.

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Increasing air traffic and demand for commercial aircraft.    Global passenger and cargo traffic has grown rapidly in recent years, driven by factors such as globalization, strong economic growth in developing countries, and liberalization of global aviation markets. According to the Economist Intelligence Unit, over the next five years global gross domestic product, or GDP, is expected to grow at an average rate of 4.2% per year. Since 1994, for every 1.0% increase in global GDP, passenger and freight traffic have, on average, grown by 1.4% and 1.6%, respectively.

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Improving lease rates.    Following a downturn from 2001 to 2003, the global commercial aviation industry has experienced a broad based recovery of aircraft values and lease rates. The relative increase in lease rates, however, has exceeded the increase in values for certain aircraft types. As a result, lease rate factors, or the ratio between lease rates and current market values, have been increasing for popular aircraft models such as 737 classics, A320s and 767-300ERs. It is possible, however, that higher lease rates could drive demand toward other aircraft models, new aircraft orders or other financing alternatives, and away from operating leasing for one or more of these popular aircraft models.

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Recent Developments

    Securitization

On June 15, 2006 we closed Securitization No. 1. The securitization generated gross proceeds of $560 million through the issuance of floating-rate aircraft lease-backed securities. We expect to refinance the securitization on or prior to June 2011. We have entered into a series of interest rate hedging contracts which result in a fixed-rate financing cost of 6.6% per annum, including recurring administrative costs and amortization of issuance expenses. The obligations under the aircraft lease-backed securities are secured by the ownership interests in our subsidiaries that own 40 of our aircraft, or Portfolio No. 1, and the related aircraft leases. A portion of the proceeds from Securitization No. 1 were used to repay amounts outstanding under our $525 million senior secured credit facility, which we refer to as Credit Facility No.1.

The aircraft in Portfolio No. 1 had an aggregate initial appraised value, or Initial Appraised Value, of $1.022 billion, based on the lesser of the mean and the median of the base values with respect to such aircraft determined in three base value appraisals from three internationally recognized appraisal firms as of dates from October to December 2005.

    Second Quarter Financial Results

Our net income for the quarter ended June 30, 2006 was $5.1 million. Revenues for the quarter ended June 30, 2006 were $42.1 million. Revenues for the six months ended June 30, 2006 were $75.1 million. EBITDA for the quarter ended June 30, 2006 was $30.2 million and included $4.3 million of expense related to common shares purchased by employees and a director nominee and $1.8 million of charges related to the write-off of deferred fees related to Credit Facility No. 1. Our basic and diluted income per share from net income for the quarter ended June 30, 2006 was $0.12 and $0.11, respectively.

A reconciliation of EBITDA to net income for the quarter ended June 30, 2006 is as follows:

			Three Months Ended June 30, 2006
			(in thousands)
Net income				$	5,050
Depreciation					11,848
Amortization					(1,515	)
Interest, net					13,164
Income tax provision					1,663
EBITDA				$	30,210

Please see ‘‘Summary Consolidated Financial Information’’ for a discussion of EBITDA as a non-GAAP financial measure and how management uses EBITDA.

Fortress

Fortress is a leading global alternative investment management firm founded in 1998 with over $21 billion of equity capital currently under management. Fortress is headquartered in New York City and has affiliates with offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Rome, San Diego, Sydney and Toronto. Fortress manages capital for a diverse group of investors, including pension funds, university endowments and foundations, financial institutions, funds-of-funds and high-net-worth individuals.

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Additional Information

We are a Bermuda exempted company and were incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act 1981 of Bermuda. To date, Fortress has contributed approximately $400 million in equity capital to us. Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and our principal executive offices are located at