- 20 Apr 2023
- René Armas Maes
- BizAv Market Insight
What’s the latest in the Super Mid-Size Jet segment? Who is leading the market, and which OEM needs to increase their sales? René Armas Maes provides an overview of the current field of competitors...Back to Articles
The Super Mid-Size Jet segment is a somewhat crowded space currently. The players include Bombardier’s Challenger 3500, Cessna’s Citation Longitude, Embraer’s Praetor 600, and Gulfstream’s G280.
Until 2021, Dassault produced the Falcon 2000S Super Mid-Size Jet, but today builds the Falcon 2000LXS competing in the Large Jet sector. Not only is the Super Mid-Size Jet market a crowded space, but it is highly competitive with an average of 112 deliveries shared by the OEMs between 2018 and 2022, according to General Aviation Manufacturers Association (GAMA) data. Typically, these jets offer ranges between 3,400 and 4,018nm, and seat two crew and ten passengers.
Bombardier launched its original Challenger 300 platform in 1999, upgrading it to the Challenger 350 in 2014 – but not before achieving significant market success. According to AMSTAT, 450 Challenger 300s were built over its production run. The Challenger 350 offered range improvements and proved just as popular with 440 units built.
Subsequently, Bombardier upgraded the Challenger 350 to the Challenger 3500, an airplane offering improved technologies in the cockpit and cabin. Time will tell whether it proves to be as popular as the earlier versions, but deliveries began in 2022.
Gulfstream’s G280, meanwhile, has been in production since 2012, and 250 aircraft had been delivered as of March 2023 according to AMSTAT. The model is a derivative of the earlier Gulfstream G200 (formerly the IAI Galaxy) which was built between 1999 and 2011.
With the G280 having been in production for 11 years, it is the oldest in-production Super Mid-Size Jet model, which could mean that of all the market competitors Gulfstream could seek to upgrade its product next.
Embraer first entered the Super Mid-Size Jet market with the Legacy 500 which it began delivering in 2014. Feature the first flat-floor stand-up cabin in the segment and fly-by-wire controls in the cockpit, it wasn’t long before the company enhanced its offering, pushing the upper range limit to above 4,000nm with the Praetor 600. Deliveries of the Praetor 600 began in 2019.
Finally, Cessna (Textron Aviation) launched its Citation Longitude in 2012, capable of flying 3,500nm. Certification and production eventually followed in 2019. The Longitude has the fuselage cross-section of the Citation Latitude Mid-Size Jet, but its cabin is longer allowing for additional seating.
A look at the GAMA shipment reports between 2018 and 2022 shows an average of 112 Super Mid-Size Jet units delivered annually (Table B - below). As depicted, the Compound Annual Growth Rate (CAGR) is +3.2%.
Note the similarity in deliveries between the years 2018 to 2019, and 2021 to 2022, even though by 2022 Dassault had exited the Super Mid-Size Jet market.
Comparing our field of Super Mid-Size Jets, Chart A (below) shows that the Cessna Citation Longitude offers the lowest variable cost (US$) per hour, per revenue seat mile followed by the Embraer Praetor 600. However, the Praetor 600 offers 15% more range.
There are other factors to consider when buying a jet, however, including residual value, service support network, and the ability to upsize (if needed) while staying with a preferred brand. And, when buying aircraft in a category where the range exceeds 3,400nm and flying times are longer, cabin comfort matters more. The Challenger 3500, for example, offers more cabin width compared to the competition.
Chart B (below) represents a productivity index for the Super Mid-Size 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.
As shown, the Praetor 600 offers the highest productivity index score of 1.91 while the Gulfstream G280 follows with a score of 1.54.
As shown, Embraer’s Praetor 600 fares well on the metrics we’ve discussed. Yet, despite having a lower price and a solid product design it continues to be outsold by Bombardier’s and Gulfstream’s models. Why is this?
While it’s clear Bombardier and Gulfstream are the market leaders in terms of Super Mid-Size Jet shipments, this doesn’t necessarily translate as maximum profitability for these OEMs. In fact, the CAGR posted in Table B would suggest a different story.
The Super Mid-Size Jet segment is popular with Fractional Ownership programs who have placed fleet orders for Bombardier’s and Gulfstream’s models in the past. These tend to come with deep discounts, meaning the OEM is essentially selling their jets at a much lower price point than list price to these Part 91K operators.
The reality is that Fractional Ownership programs can leverage their buying power to obtain a higher-priced Citation Longitude or Challenger 3500 for a much lower cost, closer to that of a Praetor 600. Nevertheless, as it becomes more established in the Super Mid-Size Jet sector, we expect the Praetor 600 to command more sales.
Interestingly, between 2021-2022 Embraer delivered 54% fewer Phenom 100EVs compared to 2018-2019. If this reflects wider production and supply chain problems, now could be a good time for Embraer to assign more resources and investment in its Praetor portfolio (both the Praetor 500 and 600), helping improve profit margins and returns.
Elsewhere, with Dassault opting to focus on the larger jet markets, Gulfstream busy with two new product development programs (the G400 and G800), and Bombardier very recently refreshing its Challenger 300 platform, it is unlikely we will see further significant product development in this market for the next two to four years.
Feasibly Gulfstream could opt to shorten its G400 platform and provide a new jet capable of flying 3,500-3,900nm missions as a replacement for the G280. If it does, that would most likely come after the G400 and/or G800 have achieved certification.
So, this current time appears to be Embraer’s window of opportunity to strengthen its hold on the market with its Praetor 600.
Perhaps Embraer will be tempted to expand the upper range of this segment beyond 4,100nm with a Praetor 600E, eventually. Before it finds the resources and board approval to achieve that, higher Praetor sales are needed in both the Mid- and Super Mid-Size jet segments.