How will two popular mid-size business jets compare side-by-side?
In this month’s Aircraft Comparative Analysis, Mike Chase provides information on a pair of popular medium-sized business jets for sale for the purpose of valuing the Hawker 900XP.
Over the following paragraphs, we’ll analyse the performance of the used Hawker 900XP and the in-production Cessna Citation Latitude to see how they compare in the market. We’ll consider productivity parameters (payload, range, speed and cabin size), and give consideration to their current market values.
The Hawker 900XP was the newest version and the latest development of the Hawker 800/800XP mid-sized business jet series. The model keeps many of the distinguishing features of the Hawker 850XP such as the winglets, Proline 21 avionics and cabin design, but uses different engines. Those new engines allow it to climb to 37,000 feet in 17 minutes, cruise at 446 ktas and fly up to 2,818 nautical miles with four passengers.
The Hawker 900XP received type certification in 2007 and production ended in 2012 after 183 aircraft were delivered. By continent, North America holds the largest fleet percentage (64%), followed by Asia (17%) and Europe (9%), accounting for a combined total of 91% of the world’s Hawker 900XP fleet.
There are 172 wholly-owned Hawker 900XP jets in operation, an additional 10 that are fractionally-owned and one under shared-ownership, according to JETNET. Twenty-eight (15.3%) of the Hawker 900XP fleet is currently leased.
The percentage of the Hawker 900XP fleet ‘For Sale’ is currently 9.8%, and 78% of those aircraft are under an exclusive broker agreement. The average days on the market before a Hawker 900XP sells presently stands at 313 days.
Payload & Range
The data contained in Table A are published in the B&CA, May 2016 issue but also sourced from Conklin & de Decker.
As we have mentioned previously, a potential operator should focus on payload capability as a key factor. The Hawker 900XP ‘Available Payload with Maximum Fuel’ (1,620 lbs) is significantly more than that offered by the Citation Latitude (1,000 lbs).
Table A also shows the fuel usage by each aircraft (sourced from Aircraft Cost Calculator). There is a difference of 44 gallons per hour (GPH) between the fuel usage of the Citation Latitude at 283 GPH and the more frugal Hawker 900XP at 239 GPH.
According to Conklin & de Decker, the Hawker 900XP cabin volume is 551 cubic feet, with 21.3 ft. cabin length. The Citation Latitude has more cabin volume (587 cu. ft.) and longer cabin length at 28.08 ft.
Chart A, courtesy of UPCAST JETBOOK, offers a cabin cross-section comparison and shows the Citation Latitude also has more width (6.42 ft. vs 6 ft.) and greater height (6 ft. vs 5.75 ft.) with a flat floor.
Using Wichita, Kansas as the point of origin, Chart B shows that the Hawker 900XP offers more range coverage than the Citation Latitude, per data from Aircraft Cost Calculator (ACC). Both jets cover all of North America (Canada, United States and Mexico) and Central America and some of South America from Wichita.
Note: For jets and turboprops, ‘Seats-Full Range’ represents the maximum IFR range of the aircraft at Long-Range Cruise with all passenger seats occupied. ACC assumes NBAA IFR fuel reserve calculation for a 200 nm alternate. The lines depicted do not include winds aloft or any other weather-related obstacles.
Cost Per Mile
The Hawker 900XP is powered by two Honeywell TFE 731-50R engines each offering 4,660 lbst, while the Citation Latitude is powered by two Pratt PW306D engines with 5,907 lbst each.
Using data published in the May 2016 B&CA Planning and Purchasing Handbook and 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 Hawker 900XP to its competition, factoring direct costs and with each aircraft flying with an 800 pound (four passengers) payload. The Citation Latitude shows the lowest cost per nautical mile at $5.18 compared to $5.25 for the Hawker 900XP, as sourced from Aircraft Cost Calculator.
Total Variable Cost
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 Hawker 900XP computes at $2,178 per hour, 4.3% less than the Citation Latitude at $2,275 per hour.
Table B contains the new and pre-owned prices from Vref Pricing Guide for each aircraft. The average speed, cabin volume and maximum payload values are from Conklin & de Decker, while the number of aircraft in-operation, percentage ‘For Sale’ and sold are as reported by JETNET.
The Hawker 900XP has 9.8% of its fleet currently ‘For Sale’, versus the Citation Latitude at 4.8% ‘For Sale’. The average number of pre-owned transactions (sold) per month for the Hawker 900XP is three units per month compared to the Citation Latitude’s four.
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 (see Table C).
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 2012-model Hawker 900XP business jet in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a used retail price of $6m, per Vref Pricing guide.
Asking Prices & Quantity
The current used jet market for the Hawker 900XP shows a total of 18 aircraft ‘For Sale’ with seven displaying an asking price ranging from $3.9m to $4.65m. While each serial number is unique, the Airframe (AFTT) hours and age/condition will cause great variations in price. Of course, 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 F 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:
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.
Others may choose different parameters, but serious business aircraft buyers are usually impressed with Price, Range, Speed and Cabin Size. After consideration of these factors, we can conclude that the Hawker 900XP displays a high level of productivity.
The Hawker 900XP shows a lower retail price (2012 model year vs 2016 model year Latitude), and slightly greater productivity compared to the Citation Latitude. The Hawker 900XP has a longer range advantage and greater payload with full fuel capability. Also it offers a lower variable cost per hour advantage. However, the Citation Latitude offers a larger cabin volume and slightly lower cost per mile.
The used Hawker 900XP shows good monthly full retail sale transactions averaging three units per month, and is still a very popular model within the fractional ownership sector. Potential operators should weigh their mission requirements precisely when picking which option is the best for them.
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 Hawker 900XP continues to be popular today, and for good reason. Those operators in the market should find the preceding comparison useful. Our expectations are that the Hawker 900XP will continue to do well on the used jet sales market for the foreseeable future.