<PAGE>


                                                                   EXHIBIT 10.17

RACC
AMENDED AND RESTATED SECURITY AGREEMENT
--------------------------------------------------------------------------------

                      RAYTHEON AIRCRAFT CREDIT CORPORATION

                                   ----------

Great Lakes Aviation, Ltd. (the "Debtor") and Raytheon Aircraft Credit
Corporation ("RACC") are parties to a Security Agreement (the "Existing Security
Agreement") dated as of March 28, 1996, which provided RACC with a security
interest in the Aircraft as defined below, and a Restructuring Agreement dated
as of the date hereof (the "Restructuring Agreement"). It is a condition
precedent to the effectiveness of the Restructuring Agreement that, in order to
further secure the payment and performance in full of all of the obligations of
the Debtor to RACC under or in respect of the Restructuring Agreement and the
other Transaction Documents as defined in the Restructuring Agreement (as so
defined, the "Transaction Documents") that the Debtor and RACC amend and restate
the Existing Security Agreement in its entirety pursuant to this Agreement and
the Existing Security Agreement is hereby so amended and restated in its
entirety as follows:

1.   Grant of Security Interest. To secure the payment and performance of all of
the obligations due Raytheon Aircraft Credit Corporation (hereinafter referred
to as "RACC") by Great Lakes Aviation, Ltd. (hereinafter referred to as
"Debtor") under the Restructuring Agreement and the Transaction Documents and
any renewals, extensions or changes in form thereof, and of any and all other
indebtedness of Debtor to RACC, either direct or indirect, absolute or
contingent, whether now existing or hereafter arising, including all such
obligations or indebtedness that would become due but for the operation of the
automatic stay pursuant to Section 362(a) of the Federal Bankruptcy Code and the
operation of Sections 502(b) and 506(b) of the Federal Bankruptcy Code and
including, without limitation, post-petition interest, and including, without
limitation, all "Obligations" as defined in the Restructuring Agreement
(collectively, the "Obligations"), Debtor hereby grants to RACC a security
interest in the following property and in all additions and accessions thereto
and substitutions and replacements thereof, all unearned insurance premiums and
insurance proceeds, and the proceeds of all of the foregoing (all of said
property is hereinafter collectively referred to as the "Collateral"):

A.      Embraer model EMB-120ER, Serial Number 120-071, Registration Number
        N71GL (the "Aircraft"), together with all other property used in the
        operation of the Aircraft or reflecting use or maintenance of the
        Aircraft, including but not limited to all engines, propellers,
        instruments, avionics, equipment and accessories attached to, connected
        with, located in or removed from the Aircraft and all logs, manuals and
        maintenance records.

        Aircraft Engines: Make: Pratt and Whitney; Model: PW118B; Shaft
        Horsepower: over 750; Serial Number (L): PCE-115680; Serial Number (R):
        PCE-115173 (each of which is capable of producing 750 or more rated
        takeoff horsepower), together with any replacement engines.

        Aircraft Propellers: Hub Make: Hamilton Standard; Hub Model: 14RF-9; Hub
        Serial Number (L): 931009; Hub Serial Number (R): 880312 (each of which
        is capable of producing 750 or more rated takeoff horsepower), together
        with any replacement propellers.

B.      All contracts and agreements of every kind (oral and written), contract
        rights, rights to receive payments, goods or services of every kind,
        general intangibles, chattel paper and accounts, whether now existing or
        owned or hereafter arising or acquired, governing, relating to or
        arising out of Debtor's right, title or interest in the Aircraft.

<PAGE>

C.      All proceeds of the foregoing, including, without limitation, all
        contract rights, general intangibles, accounts, cash, and goods, all
        payments under any insurance covering the Aircraft and any of its
        engines, propellers, equipment, accessories and accessions.

The security interest granted herein is a purchase money security interest under
the Kansas Uniform Commercial Code.

2.   Debtor's Warranty of Title and Citizenship. Except for the security
interest granted under this Security Agreement, Debtor warrants that Debtor is
(or, to the extent that the Collateral is to be acquired hereafter, will be) and
shall remain at all times the owner of the Collateral free from any prior
security interest, lien or encumbrance. WITHOUT IN ANY WAY LIMITING THE
FOREGOING, CUSTOMER SHALL NOT SELL, TRANSFER, ASSIGN, SUBLEASE, CONVEY, PLEDGE,
MORTGAGE OR OTHERWISE ENCUMBER ITS OR RACC'S INTEREST IN AND TO THE AIRCRAFT,
AND ANY SUCH SALE, TRANSFER, ASSIGNMENT, SUBLEASE, CONVEYANCE, PLEDGE, MORTGAGE
OR ENCUMBRANCE, WHETHER BY OPERATION OF LAW OR OTHERWISE, WITHOUT THE PRIOR
WRITTEN CONSENT OF RACC SHALL BE NULL AND VOID.

Debtor will defend the Collateral against all claims and demands of all persons
claiming interest therein. Debtor further warrants that it is and shall remain
at all times a citizen of the United States as defined by 49 U.S.C. Section
40102.

3.   Debtor Will Execute and Deliver Documents. Debtor will, at RACC's request,
furnish RACC such information and execute and deliver to RACC such documents and
do all such acts and things as RACC may reasonably request as are necessary or
appropriate to assist RACC in establishing and maintaining a valid security
interest in the Collateral and to assure that the Collateral is properly titled
and registered and the security interest perfected to RACC's reasonable
satisfaction. Debtor will pay the cost of filing all appropriate documents in
all public offices where RACC deems such filings necessary or desirable.

4.   Operation, Maintenance and Repair. Debtor shall operate, maintain and
repair the Collateral and retain actual control and possession thereof in
accordance with the following provisions:

     4a.  Debtor shall have complete use of the Collateral until default, and
Debtor shall use, operate, maintain and store the Collateral, or any part
thereof, properly, carefully and in compliance with all applicable statutes,
ordinances, regulations, policies of insurance and manufacturer's recommendation
and operating and maintenance manuals.

     4b.  Debtor agrees that the Collateral will be operated only by duly
certificated and qualified pilots and shall maintain U.S. registry and shall be
based within the geographical boundaries of the United States.

     4c.  Debtor shall be responsible for and pay for all expenses of owning and
operating the Collateral, including but not limited to storage, fuel,
lubricants, service, inspections, overhauls, replacements, maintenance and
repairs, all in compliance with the manufacturer's operating and maintenance
manuals, and in compliance with operating and maintenance manuals approved by
the FAA, and with FAA rules and regulations. Debtor shall properly maintain all
records pertaining to the maintenance and operation of the Collateral.

     4d.  Debtor will use reasonable care to prevent the Aircraft from being
damaged or injured and will promptly (but in no event later than 60 days after
discovery) replace any part or component of the Aircraft that may be damaged,
worn out, lost, destroyed, confiscated or otherwise rendered unsatisfactory or
unavailable for use.

<PAGE>

5.   Insurance. Debtor shall, at all times and at its sole expense, obtain and
carry the types and amounts of insurance coverage specified below:

        (a)     "All Risk" type hull insurance on the Aircraft in the kind and
                form satisfactory to RACC, including Comprehensive Ground and
                Flight Coverage and Fire and Extended Risk Coverage, both
                In-Flight and Not In-Flight, in amounts not less than the
                replacement value of the Collateral or as otherwise agreed in
                writing by RACC. All policies of insurance carried in accordance
                with this paragraph (a) shall name RACC as a Loss Payee and
                provide that the insurance proceeds from any loss involving the
                Aircraft shall be paid as follows (1) any loss not exceeding
                U.S. $100,000.00 shall be payable to Debtors with notice to
                RACC; (2) any loss exceeding $100,000.00 shall be jointly
                payable to RACC and Debtor, and (3) any total loss of the
                Aircraft shall be payable solely to RACC up to the amount of the
                unpaid principal sum and accrued interest and other charges owed
                by Debtor under the Restructuring Agreement and the other
                Transaction Documents. The policies shall include coverage
                against the perils of strikes, riots, civil commotions or labor
                disturbances, and any act of vandalism outside of the United
                States. The policies shall also specify that (i) any losses
                shall be adjusted by the insurer with the Debtor, with notice
                thereof being provided to RACC and the Aircraft manufacturer,
                and (ii) RACC and the Aircraft manufacturer shall have the right
                to fully inspect the Aircraft prior to, during and after repair
                of any loss involving the Aircraft.

        (b)     Legal liability insurance, in the kind and form satisfactory to
                RACC, with limits no less than $50,000,000.00 of combined single
                limit per occurrence, for bodily injury and property damage
                (including passengers). All policies of insurance carried in
                accordance with this paragraph (b) shall name Debtor as the
                primary insured and RACC as an additional insured thereunder.

All policies maintained by Debtor in accordance with subsections (a) and (b)
above shall also comply with the following requirements:

        (1)     be issued by insurers of recognized responsibility which are
                satisfactory to RACC;

        (2)     provide that if such insurance is canceled for any reason
                whatsoever, or any substantial change is made in policy terms,
                conditions or coverage, or the policy is allowed to lapse for
                nonpayment of premium, such cancellation, change or lapse shall
                not be effective as to RACC until thirty (30) days after RACC's
                receipt of written notice from Debtor's insurers of the
                cancellation, change or lapse in policy terms, conditions or
                coverage;

        (3)     provide that in respect of the interest of RACC in such
                policies, the insurance shall not be invalidated by any action
                or inaction of Debtor and shall insure RACC regardless of any
                breach or violation by Debtor of any warranty, declaration or
                condition contained in such policies;

        (4)     be primary without right of contribution from any other
                insurance which is carried by RACC with respect to its interest
                in the Aircraft;

        (5)     waive any right of subrogation of the insurer against RACC;
                provided, however, that the right of subrogation shall not be
                waived with respect to any acts or omissions on the part of RACC
                or the manufacturer of the Aircraft (or any of its subsidiaries)

<PAGE>

                related to products sold, handled, distributed, repaired,
                serviced or maintained by said parties;

        (6)     provide that the geographic limits, if any, contained in such
                policy shall include at a minimum all territories over which
                Debtor will operate the Aircraft; and

        (7)     provide that RACC shall have no obligation or liability for
                premiums, commissions, assessments or calls in connection with
                such insurance policies.

Debtors shall furnish to RACC evidence of the aforesaid insurance coverage in
certificate form. Evidence of renewal of each policy shall thereafter be
furnished to RACC in certificate form. Debtor covenants that it will not do any
act or voluntarily suffer or permit any act to be done whereby any insurance
required hereunder shall or may be suspended, impaired or defeated. Upon the
occurrence of an Event of Default, as defined in the Restructuring Agreement,
RACC may, at its option, apply insurance proceeds, in whole or in part, to (i)
repair or replace the Aircraft or any part thereof or (ii) satisfy any or all of
the Obligations. Any surplus proceeds are to be paid to Debtor.

6.   Power of Attorney. Debtor hereby appoints RACC and its assigns or their
designated agent as Debtor's attorney-in-fact, irrevocably, with full power of
substitution, to collect all payments with respect to the Collateral, to receive
all moneys (including, but not limited to, refunds or proceeds of insurance)
that may become due under any policy insuring the Collateral and all awards
payable in connection with the condemnation, requisition or seizure of the
Collateral, or any part thereof, to execute proofs of claim, to endorse drafts,
checks and other instruments for the payment of money payable to Debtor in
payment of such insurance moneys and to do all other acts, things, take any
actions (including the filing of financing statements or other documents,
including, without limitation, those documents referred to in Section 3 hereof)
or institute any proceedings that RACC may deem to be necessary or appropriate
at any time to protect and preserve the interest of RACC in the Collateral, or
in this Security Agreement or the Restructuring Agreement.

7.   Debtor's Possession. Until default, Debtor may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Security
Agreement. RACC may examine and inspect the Collateral, wherever located, at all
reasonable times. At its option, but without assuming any obligation to do so,
RACC may discharge taxes, liens or security interests, or other encumbrances
levied or asserted against the Collateral, may place and pay for insurance
thereon, may order and pay for the repair, maintenance and preservation thereof,
and may pay any necessary filing or recording fees. Amounts paid by RACC under
the preceding sentence shall constitute Obligations, shall be secured by the
Collateral and shall be payable upon demand, together with interest at the
Default Interest Rate as defined in the Restructuring Agreement until the
Obligations are paid in full. Debtor shall at all times keep the Collateral, and
any proceeds therefrom, separate and distinct from other property of the Debtor
and shall keep accurate and complete records of the Collateral and any such
proceeds.

8.   Indemnity. Debtor assumes liability for, and hereby agrees to indemnify,
protect, save, defend and keep harmless RACC, its agents, employees, officers,
directors, shareholders, subsidiaries, affiliates, successors and assigns (for
purposes of this Section 8, collectively "RACC"), on a net after-tax basis, from
and against any and all liabilities, obligations, losses, damages, penalties,
claims (including, without limitation, claims involving or alleging product
liability or strict or absolute liability in tort), actions, suits, demands,
costs, expenses and disbursements (including, without limitation, legal fees and
expenses) of any kind and nature whatsoever ("Claims") which may be imposed on,
incurred by or asserted against RACC, whether or not RACC shall also be
indemnified as to any such Claim by any other Person, in any way relating to or
arising hereunder, any other Transaction Document or any other documents
contemplated hereby or thereby, or the performance or enforcement of any of the
terms hereof or thereof, or in any way relating to or arising out of any

<PAGE>

Transaction Document or the performance or enforcement of any of the terms
hereof or thereof, or in any way relating to or arising out of the assertion or
enforcement of any manufacturer's, vendor's or dealer's warranties on the
Aircraft or any part thereof (including, without limitation, any warranty of
RAC), or in any way relating to or arising out of the manufacture, inspection,
construction, purchase, pooling, interchange, acceptance, rejection, ownership,
titling or re-titling, delivery, lease, sublease, possession, use, operation,
maintenance, management, condition, registration or re-registration, sale,
return, removal, repossession, storage or other disposition of the Aircraft or
part thereof or any accident in connection therewith (including, without
limitation, latent and other defects, whether or not discoverable, and any Claim
for patent, trademark or copyright infringement).

Notwithstanding the foregoing, Debtor shall not be required to indemnify RACC
for (a) any Claim caused solely and directly by the gross negligence or willful
misconduct of the RACC or (b) any Claim in respect of the Aircraft arising from
acts or events which occur after any and all other obligations of any kind
whatsoever of Debtor hereunder and under the other Transaction Documents have
been fully paid and/or performed, as the case may be, unless any such Claims
were caused by Debtor (or any stockholder, director, officer, employee,
successor, assignee, agent or servant of Debtor) or resulted or arose, directly
or indirectly, from any acts, events or omissions of any kind whatsoever during
the term hereof.

The liability of Debtor to make indemnification payments shall, notwithstanding
any expiration or other termination (whether voluntary, as the result of an
Event of Default, or otherwise) hereof or any of the other Transaction
Documents, continue to exist until such indemnity payments are irrevocably made
in full by Debtor and received by RACC. If any Claim is made against Debtor or
RACC, the party receiving notice of such Claim shall promptly notify the other,
but the failure of the party receiving notice to so notify the other shall not
relieve Debtor of any obligation hereunder.

9.   Event of Default. Upon the occurrence of an Event of Default, as defined in
the Restructuring Agreement, (a) RACC shall have the right to exercise all
remedies allowed by law, including, without limitation, those available to a
secured party under the Uniform Commercial Code and (b) RACC may require Debtor
to assemble the Collateral and make it available to RACC at a place to be
designated by RACC which is reasonably convenient to both parties. The
requirements of the Kansas Uniform Commercial Code for reasonable notification
to Debtor of the time and place of any proposed public sale of the Collateral or
of the time after which any private sale or other intended disposition is to be
made, shall be met if such notice is mailed, postage prepaid, to Debtor's
address, as shown herein, at least twenty (20) days before the time of the sale
or disposition. After deduction of all reasonable expenses of retaking, holding,
preparing for sale or lease, selling, leasing and the like, together with
reasonable costs of collection, attorneys' fees and legal expenses of RACC, the
balance, if any, of the proceeds of the sale may be applied to the payment of
any or all other Obligations, and to the satisfaction of indebtedness secured by
any subordinate security interest in the Collateral of which RACC has received
notice prior to distribution of the proceeds. Debtor shall be liable for any
deficiency after application of such proceeds, to the extent permitted by law.
After the occurrence of an Event of Default, Debtor agrees that RACC may fly or
otherwise move the Aircraft for demonstration and other purposes reasonably
related to a proposed public or private sale or other disposition of the
Collateral. Notwithstanding the foregoing, RACC may at its option and in its
sole discretion keep idle, lease, or use or operate the Aircraft without any
liability whatsoever. To the extent permitted by applicable law, Debtor hereby
waives any rights now or hereafter conferred by statute or otherwise which may
require RACC to sell, lease or otherwise use the Aircraft in mitigation of
RACC's damages as set forth in this Section or otherwise provided herein or
which may otherwise limit or modify any of RACC's rights or remedies under this
Section or otherwise provided herein.

<PAGE>

10.  Waiver of Default. No waiver by RACC of any default shall be effective
unless in writing, nor operate as a waiver of any other default or of the same
default in the future.

11.  Restriction on Transfer or Liens. Debtor will not, without the prior
written consent of RACC, sell or otherwise transfer or encumber the Collateral,
or any interest therein, or offer to do so or permanently remove or attempt to
permanently remove the Collateral from the United States. Debtor will keep the
Collateral free from any adverse security interest, lien or encumbrance and will
not permit the Collateral to be attached or replevied.

12.  Taxes. Debtor will promptly pay, or cause to be paid, when due, all taxes
and assessments upon the Collateral or upon its use or operation or upon this
Security Agreement and the Obligations.

13.  Change of Address. Debtor will notify RACC in writing of any change of
address from that shown in this Security Agreement within ten (10) days of such
change.

14.  GOVERNING LAW AND CHOICE OF FORUM. THIS SECURITY AGREEMENT WAS MADE AND
ENTERED INTO IN THE STATE OF KANSAS AND THE LAW GOVERNING THIS TRANSACTION SHALL
BE THAT OF THE STATE OF KANSAS AS IT MAY FROM TIME TO TIME EXIST. THE PARTIES
AGREE THAT ANY LEGAL PROCEEDING BASED UPON THE PROVISIONS OF THIS SECURITY
AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN EITHER THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF KANSAS AT WICHITA, KANSAS, OR IN THE EIGHTEENTH
JUDICIAL DISTRICT COURT OF SEDGWICK COUNTY, KANSAS, TO THE EXCLUSION OF ALL
OTHER COURTS AND TRIBUNALS. NOTWITHSTANDING THE ABOVE, IN THE EVENT AN "EVENT OF
DEFAULT" SHOULD OCCUR, RACC (AT ITS SOLE OPTION) MAY INSTITUTE A LEGAL
PROCEEDING IN ANY JURISDICTION AS MAY BE APPROPRIATE IN ORDER FOR RACC TO OBTAIN
POSSESSION OF THE COLLATERAL. THE PARTIES HEREBY CONSENT AND AGREE TO BE SUBJECT
TO THE JURISDICTION OF THE AFORESAID COURTS IN SUCH PROCEEDINGS.

15.  WAIVER OF RIGHT TO JURY TRIAL. ALL PARTIES TO THIS SECURITY AGREEMENT
HEREBY VOLUNTARILY, KNOWINGLY AND IRREVOCABLY WAIVE ANY CONSTITUTIONAL OR OTHER
RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN THE EVENT OF LITIGATION CONCERNING
THIS SECURITY AGREEMENT.

16.  Damages. To the extent that any party hereto is subject to liability for
any breach under this Security Agreement, the liability of such party shall be
limited to the actual and direct monetary damages caused by such breach. In no
event shall any party hereto be liable for indirect, special, consequential,
multiple or punitive damages, or any damage deemed to be of an indirect or
consequential nature arising out of or related to its performance hereunder,
whether based upon breach of contract, warranty, negligence and whether grounded
in tort, contract, civil law or other theories of liability, including strict
liability. To the extent that this limitation of liability conflicts with any
other provision(s) in this Security Agreement, said provision(s) shall be
regarded as amended to whatever extent required to make such provision(s)
consistent with this Section 16.

17.  Enforceability. The unenforceability of any provision hereof shall not
affect the validity of any other provision hereof.

18.  Binding Agreement. All obligations of Debtor hereunder shall bind the
heirs, agents and attorneys-in-fact, successors and assigns of Debtor. If there
be more than one Debtor, their liabilities shall be joint and several. All
rights of RACC hereunder shall inure to the benefit of its successors and
assigns.

<PAGE>

19.  Assignment. RACC may transfer or assign all or any part of its interest in
this Security Agreement without the consent of Debtor or any other party. Debtor
shall not sell, assign, transfer, encumber or convey any of its interests in the
Collateral or in this Security Agreement without the prior written consent of
RACC.

20.  Entire Agreement. This Security Agreement, the Restructuring Agreement and
the other Transaction Documents constitute the entire agreement between and
among the parties with respect to the subject matter hereof. There are no verbal
understandings, agreements, representations or warranties not expressly set
forth herein. Neither this Security Agreement, the Restructuring Agreement or
any of the other Transaction Documents shall be changed orally, but only by
writing signed by the parties hereto.

21.  Miscellaneous. Time is of the essence hereof. RACC's failure to insist on
performance of any of the terms and conditions contained in this Security
Agreement, the Restructuring Agreement or the other Transaction Documents or to
exercise any right or benefit will not constitute a waiver unless the waiver is
in writing, executed by an authorized representative of RACC. RACC's waiver of
any default hereunder or thereunder will not thereafter waive those terms,
conditions, rights or privileges, whether of the same or a similar type.

DEBTOR HEREIN ACKNOWLEDGES THAT DEBTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE
TERMS AND CONDITIONS OF THIS SECURITY AGREEMENT. BY EXECUTION HEREOF, THE
UNDERSIGNED HEREBY CERTIFIES THAT HE/SHE IS DULY AUTHORIZED TO EXECUTE THIS
SECURITY AGREEMENT IN THE CAPACITY STATED BELOW.

Executed as of this 31st day of December, 2002, at Wichita, Kansas.

Debtor: Great Lakes Aviation, Ltd.

         /s/ Charles R. Howell IV          CEO
         ------------------------------------------
         (signature)                       (title)

Address: 1022 Airport Parkway
         Cheyenne, Wyoming 82001

RAYTHEON AIRCRAFT CREDIT CORPORATION

By: /s/ Andrew A. Mathews
    ---------------------
            "RACC"