In this month’s Aircraft Comparative Analysis, Mike Chase provides information on several popular business jets for the purpose of valuing Cessna’s Citation Mustang.
How do the Citation Mustang, Citation M2, and Embraer Phenom 100 jets compare in the market today? Over the following paragraphs, we’ll consider productivity parameters (payload, range, speed, and cabin size) and cover current market values.
The Citation Mustang is even smaller and lighter than Cessna’s first-ever corporate jet built in 1971, the Citation 500. The Citation 500 was developed to be the first affordable, entry level executive jet and was marketed to compete directly with the Beech King Air. Ironically today, Cessna and Beech products both come under Textron Aviation.
The Citation Mustang (Model 510) was first announced in 2002, and was introduced to compete with the new Very Light Jets (VLJs) being developed for entry level jet customers. The first flight of the Mustang occurred in April 2005, FAA Type Certification was received in September, 2006, and April 2007 marked the first retail delivery.
Powered by two Pratt & Whitney PW615F turbofan engines, the Mustang hosts the all-glass Garmin G1000 avionics system. FAA Type Certification for the aircraft includes single-pilot operations.
Earlier in 2017, after a 12-year production run, Textron ceased producing the Citation Mustang. Today, there are 467 wholly-owned Mustang business jets (11 are in shared ownership and one is in fractional ownership for a total fleet of 479 in operation worldwide). The percentage ‘For Sale’ is 10.6% with 67% under an exclusive broker agreement and average 302 days on the market. 4.2% of the Mustang fleet is leased, according to JETNET.
By continent, North America has the largest Mustang fleet percentage (60%), followed by Europe (23%) for a combined total of 83%.
With the announcement that Textron would stop building Mustangs, the M2 - in production since 2013 – becomes the new entry point for the Citation line. Did Textron raise the bar for entry into the new-build Citation market? We hope to clarify this among other things in the following analysis…
Payload & Range
As we have mentioned in past articles, a potential operator should focus on payload capability as a key factor. Table A (left) reveals the Citation Mustang (at 550lbs) offers greater ‘Available Payload with Maximum Fuel’ than the Citation M2 514lbs, a value less than that offered by the Phenom 100 at 646 lbs.
In addition, Table A shows the fuel usage by each aircraft in this field of study. The Mustang is the most frugal business jet, burning less fuel per hour (88 gallons per hour (GPH)) compared to the Phenom 100 (95 GPH) and the M2 (105 GPH). The GPH calculation is fuel usage for a 600 nm mission with a flight time of 1 hour and 56 minutes, as sourced from Chase & Associates.
Cabin Cross-Section Views
Chart A offers a cabin cross-section comparison and depicts that the Mustang offers less width (4.58 ft) and height (4.5 ft) than the Citation M2 (4.83 ft. x 4.75 ft.) and Phenom 100 (4.92 ft. x 5.08 ft.).
Interior height is measured at the center of the cross section. It may be based on an aisle that is dropped several inches below the main cabin floor that supports the passenger seats. This is the case for all three of our comparative aircraft.
There are two width dimensions that can be used; one for the widest part of the cabin and the other at floor level. We use the measurement of the widest part of the cabin – the maximum interior width.
Meanwhile, cabin length can be measured in three ways, each yielding differing cabin volumes. For example, the Main Seating includes all passenger seats but not the lavatory areas. Due diligence by an owner/operator is required to understand comparative aircraft interior measurements.
Depending on the interior cabin length measurement that one selects from the above table, prospective buyers will find different cabin volumes for each aircraft. More important, however, is the measurement of personal space (cubic feet) when comparing aircraft cabins, which will give a relative value to compare between candidate business jets.
Table B reveals that the personal space per passenger calculated for the Mustang is 40.8 cubic feet – less than the M2 (50.3 cubic feet) and the Phenom 100 (53 cubic feet) based on the gross cabin volume measurement using four seats in each aircraft.
Some manufacturers provide ‘optimistic’ measurements. Prospective buyers are advised to measure the aircraft themselves or consult with interior experts to provide an apples to apples comparison.
As depicted by Chart B using Wichita as the origin point, the Citation Mustang shows less range coverage than the Embraer Phenom 100 and the Citation M2, which have almost the same range.
Note: For jets and turboprops, ‘four passengers with available fuel’ represents the maximum IFR range of the aircraft at Long-Range Cruise with four passenger seats occupied. NBAA IFR fuel reserve calculation for a 200nm alternate is assumed. The lines depicted do not include winds aloft or any other weather-related obstacles.
The Mustang is powered by two Pratt & Whitney PW615F engines with 1,460 lbst each. The Phenom 100 is also powered by two Pratt & Whitney powerplants (PW617F-E) each offering 1,730 lbst, while the M2 is powered by two Williams International FJ44-1AP-21 engines with 1,965 lbst.
Cost Per Mile
Using data published in the August 2016 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet-A fuel cost used from the August 2016 edition was $4.90 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 Mustang to the Phenom 100 and the M2, factoring direct costs and with each aircraft flying a 600nm mission with an 800 pound (four passengers) payload. The Mustang shows the lowest cost per nautical mile at $1.85 compared to $2.20 for the Phenom 100 and $2.47 for the M2.
Total Variable Cost
The ‘Total Variable Cost’ (hourly) 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 Mustang computes at $636 per hour, which is considerably less than the Phenom 100 at $748 per hour and the M2 at $908 per hour.
Aircraft Comparison Table
Table C contains the New prices from Vref Pricing Guide for each aircraft. The average speed and 4-pax ranges are from Textron Aviation and Embraer, while the number of aircraft in-operation, fleet percentage ‘For Sale’, and average sold are as reported by JETNET.
The Mustang business jet has 10.9% of its fleet currently ‘For Sale’ and the Embraer Phenom 100/E/EV is at 11.3% ‘For Sale’ followed by the M2 at 3.3%. Also, the average number of new and used transactions (sold) per month for the Mustang is eight aircraft, compared to the Embraer Phenom 100 and M2 (five each).
Aircraft that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, taxpayers are allowed to accelerate the depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period.
In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favorable Alternative Depreciation System (ADS) where depreciation is based on a straight-line method, meaning that equal deductions are taken during each year of the applicable recovery period. In most cases, recovery periods under ADS are longer than recovery periods available under MACRS.
There are a variety of factors that taxpayers must consider in determining if an aircraft may be depreciated, and if so, the correct depreciation method and recovery period that should be utilized. For example, aircraft used in charter service (i.e. Part 135) are normally depreciated under MACRS over a seven-year recovery period or under ADS using a twelve-year recovery period.
Aircraft used for qualified business purposes, such as Part 91 business use flights, are generally depreciated under MACRS over a period of five years or by using ADS with a six-year recovery period. There are certain uses of the aircraft, such as non-business flights, that may have an impact on the allowable depreciation deduction available in a given year.
Table D depicts an example of using the MACRS schedule for a 2017 Mustang business aircraft in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a new retail price of $3.350m, per Vref Pricing guide.
Asking Prices & Quantity
The current used market for the Citation Mustang shows a total of 50 aircraft ‘For Sale’ with 23 displaying an asking price (ranging between $1.495m and $2.825m. We also reviewed the used Phenom 100/E/EV market (40 for sale) and Citation M2 market (eight for sale) and noted asking prices ranged between $1.695m and $3.695m.
According to Vref, a 2013-model Citation Mustang’s value - as a percentage of the New Retail price - has declined to 65%. A 2013-model Phenom 100 has retained its value marginally better at 69% of new, and the M2 has declined to 75% of its new price in 2013.
While each serial number is unique, the Airframe (AFTT) hours and age/condition will cause great variations in price, and the final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.
The points in Chart E are centered on the same aircraft. Pricing used in the vertical axis is as published in the Vref Pricing Guide. The productivity index requires further discussion in that the factors used can be somewhat arbitrary. Productivity can be defined (and it is here) as the multiple of three factors:
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 determine how the Citation Mustang ranks within its field.
The Mustang is priced less than the Phenom 100 and M2, offers much lower costs, is the most frugal in fuel usage, but offers less range and a smaller gross cabin volume compared to the Phenom 100 and Citation M2. Operators should weigh up their mission requirements precisely when picking which option is the best for them.
The Citation Mustang is showing good monthly full retail sale transactions that have averaged eight aircraft sold per month compared to Phenom 100 and M2 with an average of five per month each.
From the above data, we can also conclude that the entry-level into Textron’s new business jet ownership just got slightly higher with the retirement of the Citation Mustang, perhaps reflecting on the continued popularity of the Mustang in the used market at this time.
One of the other interesting trends to watch for will be that of brand loyalty. Will the majority of Citation Mustang owners looking to move up into something bigger automatically select the Citation M2, or be lured by the competing Phenom 100 EV and HondaJet? Time will tell…
Within the preceding paragraphs we have touched upon several of the attributes that business aircraft operators value. There are other qualities such as airport performance, terminal area performance, and time to climb that might factor in a buying decision.
The Citation Mustang continues to be popular today as it ends production after 12 years. Those operators seeking Cessna Citation Mustang jets for sale should find the preceding comparison useful. Our expectations are that the Citation Mustang will continue to do well in the used jet market for the foreseeable future.