- 01 Feb 2022
- Mike Chase
- Helicopter Comparison
Mike Chase provides information on two popular single-engine light turbine helicopters with a view to pinpointing the Bell 206B-3 JetRanger III and MD Helicopters’ MD 500E within the market.Back to Articles
Over the following paragraphs, we’ll analyse the performance of the Bell 206B-3 and the MD 500E to see how they compare within the new and pre-owned helicopter market. We’ll consider a variety of productivity parameters (including payload, range, speed, and cabin size), and discuss current market values.
In this comparison we have chosen two helicopters that have similar Maximum Takeoff Weights (MTOW). The Bell 206B-3 offers an MTOW of 3,200lbs, compared to 3,000lbs for the MD 500E. Interestingly, however, the maximum sling weight for the Bell 206B-3 (1,000lbs) is less than that of the MD 500E (1,500lbs). So, what are the pros and cons of each, and to whom would each appeal?
Bell 206B-3 JetRanger III
The 206B-3 JetRanger III replaced the 206B JetRanger II in 1977 and was produced until 2009, utilizing an upgraded Rolls-Royce 250-C20J engine. The model also saw the addition of two inches to the tail rotor diameter for yaw control.
As of this writing, there were 1,652 Bell 206B-3 helicopters in operation worldwide. A total of 857 Bell 206B-3 units had been retired/stored while, by continent, North America accounted for the largest fleet percentage (55%), followed by South America (12%) and Europe (11%), for a combined total of 79% of the world’s fleet.
The largest single Bell 206B-3 fleet owner is the Gov’t of USA – Naval Air Systems Command (118 aircraft).
The MD 500E has been in production since 1981, and is also commonly known as model 369E. It’s a single turbine-engine light utility helicopter. Models produced after 1991 feature an increased forward canopy window area. All models have a T-tail for greater flight stability.
Worldwide, there were 308 MD 500E helicopters in operation at the time of writing, and a further 118 units had been retired/stored. By continent, North America had the largest fleet percentage (51%), followed by Europe (22%), accounting for a combined total of 73%.
The largest MD 500E single fleet owner is Haverfield International, Inc., which operated eight aircraft at the time of writing.
The data in Table A is sourced from each OEM. As we have mentioned previously, a potential operator should focus on payload capability as a key factor. The Bell 206B-3 ‘Available Payload with Maximum Fuel’ (208lbs) is less than that offered by the MD 500E (504lbs).
Table A: Bell 206B-3 JetRanger III vs MD 500E Payload Comparison
Chart A, courtesy of UPCAST JETBOOK, offers a cabin cross-section comparison for our comparative models. As depicted, the Bell 206B-3 cabin has less width (4.2ft vs 4.5ft) and less height (4.2ft vs 5ft) than the MD 500E cabin. Not depicted by the cross-section, the cabin length of the Bell 206B-3 is also shorter than that of the MD 500E (7ft vs 9ft).
Nevertheless, the Bell 206B-3 has 16cu.ft of luggage space, which is twice that of the MD 500E (8cu.ft). The typical seating configuration for both helicopters are the same at four seats (including one crew member).
Chart A: Bell 206B 3 JetRanger III vs MD 500E Cabin Comparison
As depicted by Chart B, using Grand Prairie, Texas as the origin point, the Bell 206B-3 helicopter – with a ‘Tanks Full’ range of 365nm – travels further than the MD 500E (275nm range).
Chart B: Bell 206B-3 JetRanger III vs MD 500E Range Comparison
The Bell 206B-3 has a single Rolls-Royce 250-C20J turbine engine that offers 420shp at take-off, and 270shp continuous. By comparison, the MD 500E is powered by a single Rolls-Royce 250-C20B turbine engine producing 420shp at take-off, and 350shp continuous.
Helicopter Usage Comparison
Chart C shows the usage of both helicopters broken into market groupings. At the time of writing, the largest defined usage for the Bell 206B-3 helicopter was ‘Business’ (36%) followed by Charter (23%). The most popular usage for the MD 500E is ‘Business’ (40%) and Charter (11%).
Chart C: Bell 206B 3 JetRanger III vs MD 500E Utilization Comparison
Cost Per Mile Comparison
Chart D details the ‘Cost per Mile’ for our comparative helicopters (per JETNET data), factoring the direct costs (no depreciation), and with each aircraft flying a 200nm mission. The average US Jet A fuel cost used for July 2022 was $7.14 per gallon.
The Bell 206B-3 shows a higher cost per nautical mile at $5.33, than the MD 500E ($4.60); a difference of 15.9%.
Chart D: Bell 206B 3 JetRanger III vs MD 500E Cost Per Mile Comparison
Total Variable Cost
The ‘Total Variable Cost’ illustrated in Chart E is defined as the Cost of Fuel Expense, Maintenance Labor Expense, Scheduled Parts Expense and Miscellaneous Trip Expense.
These costs DO NOT represent a direct source into every flight department and their trip support expenses. For comparative purposes, the costs presented are the relative differences, not the actual differences since these may vary from one flight department to another.
Chart E: Bell 206B 3 JetRanger III vs MD 500E Variable Cost Comparison
Sourced from JETNET, the Total Variable Cost for the Bell 206B-3 is $443 per hour, which is $26 or 5.5% less per hour than the MD 500E ($469).
Table B contains the pre-owned price for each helicopter (2009 models), as sourced from Aircraft Bluebook Pricing Guide (Summer 2022).
The average speed, cabin volume and maximum payload values are sourced from the OEMs and B&CA, while the number of helicopters in-operation and percentage ‘For Sale’ are as reported by JETNET.
The Bell 206B-3 had 3.5% of its fleet ‘For Sale’ at the time of writing, compared to 3.6% for the MD 500E. The average number of new and pre-owned transactions per month for the Bell 206B-3 averaged 10 units per month over the preceding 12 months, compared to three for the MD 500E.
Table B: Bell 206B 3 JetRanger III vs MD 500E Market Comparison
Asking Prices & Quantity
The used helicopter market for the Bell 206B-3 showed a total of 58 helicopters ‘For Sale’, as of this writing, with 31 displaying asking prices ranging between $349k and $1.05m. Eleven used MD 500E helicopters were also available for sale, eight of which had asking prices ranging between $775k and $2.2m.
While each serial number is unique, the amount of total time on the airframe (AFTT), and age/condition will cause great variation in prices. Of course, the final sale price must be negotiated between the seller and buyer before the sale of an aircraft is completed.
Helicopters 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, helicopters 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 is a variety of factors that taxpayers must consider in determining if a helicopter may be depreciated, and, if so, the correct depreciation method and recovery period that should be utilized. For example, helicopters 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.
Helicopters used for qualified business purposes, such as Part 91 business use flights, are 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 helicopter, such as non-business flights, which may have an impact on the allowable depreciation deduction available each year. Table C depicts an example of using the MACRS schedule for a 2009-model Bell 206B-3 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a pre-owned 2009 retail price of $900k, per Aircraft Bluebook (Summer 2022 data).
Table D depicts an example of using the MACRS schedule for a 2009-model MD 500E in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a pre-owned retail price of $850k, per Aircraft Bluebook (Summer 2022 data).
Table C and D: 2009 Bell 206B 3 Jetranger III and 2009 MD 500E Sample MACRS Tax Depreciation Schedule
The points in Chart F are centered on the same helicopters. Pricing used in the vertical axis is as published in the Aircraft Bluebook Summer 2022 data for model year 2009. The productivity index requires further discussion in that the factors used can be arbitrary. Productivity can be defined (and it is here) as the multiple of three factors:
1. Tanks Full Range with available fuel;
2. The Long-Range cruise speed flown to achieve that range;
3. The cabin volume available for passengers and amenities.
Chart F: Bell 206B 3 JetRanger III vs MD 500E Productivity Comparison
Others may choose different parameters, but serious helicopter buyers are usually impressed with Price, Range, Speed and Cabin Size. After consideration of these, we can conclude that the Bell 206B-3 displays a slightly higher level of productivity, but at a slightly higher pre-owned purchase price (2009 model).
The Bell 206B-3 posts a higher cost per mile (15.9%), but a slightly lower hourly operating cost (5.5%) capability compared to the MD 500E. It provides a higher ‘tank full’ range, but less payload with available fuel, and a slightly smaller cabin than the MD 500E.
Overall, these two models are well matched, competing for a similar pre-owned helicopter buyer profiles. Both list ‘Business’ use as the top mission usage (per JETNET), and it’s clear to see how each is very viable on today’s market.
Nevertheless, operators should weigh up their mission requirements precisely, since each model offers slight differences in key areas. Operators will need to decide whether, for example, longer range or greater full-fuel payload capability is more important. And just how much difference will the slightly bigger cabin dimensions make, when both offer the same seating?
And, there are other factors to consider beyond those covered in this article that might factor in a buying decision. Ultimately, the Bell 206B-3 and the MD 500E continue to be popular on the market today, and current and prospective operators should find the preceding comparison useful.
Both models should continue to do well in the pre-owned helicopter market for the near-term future.
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