Aircraft Comparative Analysis - Gulfstream G550
Category: Corporate Aircraft – Comparative Analysis
Author: Mike Chase
In this month’s Aircraft Comparative Analysis, we’ll provide information on a pair of pre-owned ultra-long-range, large cabin business jets in the $50m-plus range for the purpose of valuing the Gulfstream G550 aircraft. Just how important is having the longest-range aircraft in the ultra-long-range jet market? This is one question that we’ll seek to answer.
The current New/Used percentage split for the Gulfstream G550 aircraft is 62% ‘New’ and 38% ‘Pre-Owned’ according to JETNET’s records, and there are currently 330 G550 aircraft in operation around the world. 15 of those are fractionally owned; five are in shared ownership; and 310 wholly-owned. Over the following paragraphs we’ll consider the usual productivity parameters - payload/range, speed and cabin size - and cover current and future market values comparing the G550 with Bombardier’s Global Express XRS (recently re-named the Global 6000).
The G550 traces its roots to the Gulfstream GV which was the first ultra-long-range large cabin business jet produced. The GV started delivering to customers in 1995. Most notable about the GV is its 6,500nm range, made possible (in part) by the BR710A1-10 engines powering it. The GV’s range makes it capable of non-stop flight from New York to Tokyo.
Features on the GV include enhanced weather radar, autopilot and head-up display for the pilot. Safety features include the First Enhanced Vision Systems (EVS) that allows increased visibility in adverse environments. The aircraft is also equipped with commercial and military communications equipment to provide secure voice and data capability.
Two new aircraft followed the GV, the Gulfstream G550 in 2003 and the G500 in 2004. Both aircraft are still in production today. The G550 will shortly relinquish its title as the top-end of Gulfstream’s in-service product line, however, with Gulfstream G650 deliveries set for initial customer deliveries this year.
The Gulfstream G550 entered the market a year earlier than the Global Express XRS. As Chart A represents, the Aircraft Delivery market-share percentage currently gives the G550 (at 330 units) 68% share versus the Global Express’ 32% share (at 152 units). That’s a combined total of 482 aircraft in operation for these two models.
PAYLOAD AND RANGE
The data contained in Table A is published in the Business & Commercial Aviation (B&CA) May 2011 issue, and is also sourced from Conklin & de Decker. As we mentioned in past articles, a potential operator should focus on payload capability as a key factor. The G550’s ‘Available payload with Maximum Fuel’ at 2,500 lbs is slightly greater than that of the Global Express XRS at 2,408 lbs.
According to Conklin & de Decker, the cabin volume of the G550 at 1,669 cubic feet is less than the Global Express XRS (2,140 cubic feet) as represented in Chart B. Further detail is provided on exact cabin dimensions in Table B.
As mentioned, the G550 is powered by two Rolls-Royce BR710-C4-11 engines, each offering 15,385 pounds of thrust. The Global Express XRS is also powered by Rolls-Royce - this time a pair of BR710-A2- 20 engines, each offering 14,750 pounds of thrust.
COST PER MILE COMPARISONS
Using data published in the May 2011 B&CA Planning and Purchasing Handbook and the August 2011 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet A fuel cost used from the August 2011 edition was $6.04 per gallon at press time, so for the sake of comparison we’ll chart the numbers as published.
Note: Fuel price used from this source does not represent an average price for the year.
Chart C details ‘Cost per Mile’, and compares the G550 to the Global Express XRS factoring direct costs, and with each aircraft flying a 6,000nm mission with a 1,600 pound (eight passenger) payload. The G550, at $5.41 cost per mile, is lower by 13% compared to the Global Express XRS ($6.22 cost per mile).
TOTAL VARIABLE COST COMPARISONS
The ‘Total Variable Cost’, illustrated in Chart D, is defined as the cost of Fuel Expense, Maintenance Labor Expense, Scheduled Parts Expense and Miscellaneous Trip Expense. The total variable cost for the G550 at $2,451 is lower by 17.9% compared to the Global Express XRS at $2,984.
The points in Chart E center on the same aircraft. Pricing used in the vertical axis is as published in the B&CA August 2011 Operations Planning Guide. The productivity index requires further discussion in that the factors used can be somewhat arbitrary.
Productivity can be (and it is here) defined as the multiple of three factors:
1. Range with full payload and available fuel;
2. The long range cruise speed flown to achieve that range;
3. The cabin volume available for passengers and amenities.
The result is a very large number so for the purpose of charting, each result is divided by one billion. The examples plotted are confined to the aircraft in this study. A computed curve fit on this plot would not be very tight, but when all business jet aircraft are considered, the “r” squared factor would equal a number above 0.9.
Others may choose different parameters, but serious business aircraft buyers are usually impressed with Price, Range, Speed and Cabin Size. After consideration of the Price, Range, Speed, and Cabin Size, we can conclude that the G550, as shown in our productivity index, is competitive with the Global Express XRS - largely thanks to its longer mission reach and lower costs. In various other aspects shown, the Global Express XRS edges the comparison.
The Gulfstream G550 entered the market one year before the Global Express XRS and continues to sell twice the number of aircraft (330 vs 152).
Table C contains the average equipped prices from B&CA magazine for each aircraft. The average speed, cabin volume and maximum payload values are from Conklin and de Decker. The number of aircraft in-operation and percentage ‘For Sale’ are as reported by JETNET. It’s interesting to note that both the G550 (at 4.2% for sale) and the XRS (at 4.6% for sale) represent a sellers’ market well below the traditional 10% ‘For Sale’ mark.
LOCATION BY CONTINENT
Of the 310 wholly-owned G550 aircraft in operation, the major based-at locations globally are in Asia, Europe and North America where a combined total of 92% of the fleet resides.
The airport performance for the G550 illustrated in Table D includes airport Take-Off Field Length (TOFL), Landing and Balanced Field Length, and shows that the G550 has a shorter Take-Off Field Length (at sea level elevation, ISA Temp) compared to the XRS. At a higher altitude with warm temperatures, the XRS wins out. The G550 also has a slightly longer Balanced Field Length.
Within the preceding paragraphs we have touched upon several of the attributes that business aircraft operators value. There are other qualities such as terminal area performance, time to climb performance, and maximum transition altitude levels that might factor in a buying decision, too, however.
Essentially, the Gulfstream G550 fares well against its competition depending on what aspects of its performance are important to your mission requirements, so those operators in the market should find the preceding comparison of value. Our expectations are that the Gulfstream G550 aircraft will continue to do very well in the new and pre-owned market moving forward - especially with regions such as Asia (where the G550 is already popular) which is expected to grow significantly.
For more information: Michael Chase is president of Chase & Associates, and can be contacted at 1628 Snowmass Place, Lewisville, TX 75077; Tel: 214-226-9882; Web: www.mdchase.com
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