Their is no other way to look at it, you are obligated to replace and make him whole period.

Its one thing to test other peoples airplanes for them under request or or train them using their airplanes and that comes with an entirely different set of obligations and responsibilitys however borrowing airplanes for your own enjoyment or perhaps your continued training is very bad form and most seasoned flyers would never do that.

If you expect for this individual to remain a friend either do the right thing in the form of replacement or make some other form of restitution.

John