Review of the Large Private Jet Market

What’s the latest in the Large Jet segment of Business Aviation? Who is leading the market, and what new products or variants are expected soon? René Armas Maes provides an overview of the current field of competitors...

René Armas Maes  |  24th July 2023
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    René Armas Maes
    René Armas Maes

    René Armas Maes, Vice President, Commercial, Jet Link International LLC, is an international...

    Gulfstream G500 private jet in flight over forest


    The growing popularity of the Large Jet segment in Business Aviation is associated with aircraft comfort, amenities, seat capacity and the ability to travel long distances. Among the players in this segment today are Bombardier’s Challenger 650, Dassault’s Falcon 2000LXS and Falcon 900LX, and Gulfstream’s G500.

    Typically, the Large Jets featured here offer ranges between 4,050 and 5,300nm, and seat two crew and up to twelve passengers (see Table A below).

    Bombardier launched its original Challenger 600 platform in 1978 and has upgraded it several times across the ensuing decades. Most recently, in 2015 the Challenger 650 replaced the Challenger 605 on Bombardier’s production line.

    Compared to the Challenger 605, the Challenger 650 offers a redesigned cabin, new Collins Pro Line 21 Advanced avionics, and enhanced take-off thrust among other things. At the time of writing Aircraft Bluebook showed a list price of $33m for a 2023 model Challenger 650.

    Table A: Current Large Private Jet Platform Specifications

    AMSTAT data shows that over 400 Challenger 605 and Challenger 650 units have been built. Nevertheless, the Challenger 600 platform is more than 40 years old, and many within the industry argue that it will need to be replaced if Bombardier wishes to remain competitive in this segment.

    Gulfstream, for example, offers the clean-sheet G500 model that is capable of 5,300nm range. The G500 replaced the aging G450 in 2018, and compared to the G450 it offers more speed and range while retaining the same fuel burn.

    Additionally, Gulfstream will introduce the 4,200nm range G400 to the market in 2025. A shortened version of the $49.5m G500, the G400 has a purchase price of approximately $34.5m.

    Like Gulfstream, Dassault offers two products on the Large Jet market, each with marked differences in terms of their range capabilities. The $36m Dassault Falcon 2000LXS has been in production since 2013 and offers a range of 4,065nm, while the $44.7m Falcon 900LX (in production since 2010) provides a range of 4,750nm.

    Large Jet Market Overview

    Table B provides a look at the GAMA shipment reports between 2018 and 2022, including aircraft delivery estimates from the author. It shows an average of 56 Large Jet units delivered annually between the selected OEMs. As depicted, the Compound Annual Growth Rate (CAGR) is +2.1%.

    Table B: Large Private Jet Shipments 2018-2022

    It is worth noting that Bombardier’s Challenger 650 shipments have steadily reduced during the timeframe.

    Competing in the same range category as the future Gulfstream G400, it is a reasonable assumption that Challenger 650 shipment will be further impacted when the G400 comes to the market.

    Variable Cost per Revenue Seat Mile vs. Range

    Further comparing our field of Large Jets, Chart A shows that the Gulfstream G500 offers the lowest variable cost (US$) per hour, per revenue seat mile, followed by the Bombardier Challenger 650. However, the Gulfstream G500 offers 29% more range than the Challenger 650, but with a price tag that is $10m greater.

    Chart A: Large Jet Variable Cost per Seat Mile Comparison

    Providing a closer range and price comparison, the Gulfstream G400 is expected to offer slightly more range than the Challenger 650 and Falcon 200LXS. Furthermore, the G400 promises greater cabin volume than its direct competitors.

    Nevertheless, other factors come into a buying decision, including an aircraft’s residual value, service support network, and the ability for customers to upsize (if needed) while staying with a preferred OEM brand.

    Productivity Index

    Chart B represents a productivity index for the Large Jets in our analysis. The productivity index multiplies aircraft range (with NBAA reserves, and in a high-density seating configuration), cabin volume, and long-range cruise speed, dividing the result by 1,000,000,000.

    Chart B: Large Business Jet Productivity Comparison

    As shown, the Gulfstream G500 offers the highest productivity index score of 3.9 while the future Gulfstream G400 follows with a score of 2.6. The Falcon 900LX follows close behind.

    To Summarize...

    Currently, both of Gulfstream’s products fare well on the metrics we’ve discussed for the Large Jet category. In the case of anticipating the next moves from Bombardier and Dassault in the Large Jet field, both could opt to keep their investment low with shortened versions of their Global 5500 and Falcon 6X platforms, respectively.

    For example, a future Global 4500 and Falcon 5X/4X could help reinvigorate the category – and a jet capable of flying 4,200-4,750nm could hit a market sweet-spot if priced correctly.

    It will be especially interesting to see what Dassault does once the Falcon 6X and Falcon 10X enter the market, while for Bombardier – whose focus has ultimately been on the Ultra-Long-Range and Super Mid-Size Jet categories for a while – now is an important time to decide what comes next in the Large Jet field.

    To steal a march on the competition, any new product would need to be priced at $35m or below, have a Direct Operating Cost below $5,000 per hour, and offer a cabin volume greater than 1,385cu.ft.

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    René Armas Maes

    René Armas Maes

    Editor, Buyer Strategy & Finance

    René Armas Maes, Vice President, Commercial, Jet Link International LLC, is an international aviation consultant and experienced C-Level professional. He has built a successful track record for developing and delivering Business Aviation strategies for Fortune 500 companies, Venture Capital firms, and HNWIs.

    René is a regular columnist for Bloomberg (financial), America Economia (business) and a speaker at aviation conferences worldwide.


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