Mike Chase provides information on two popular Single Turbine Helicopters for the purpose of valuing the Airbus Eurocopter AS350-B3.
Helicopter Comparison: Airbus AS350-B3 versus Bell 206L-4
Over the following paragraphs, we’ll consider productivity parameters (payload/range, speed and cabin size) and cover current and future market values for Airbus AS350-B3s. The field in this comparative study includes the Bell LongRanger 206L-4.
The AS350-B3 Ecureuil is the high performance version of the single-engine Ecureuil series. It features a more powerful engine than the AS350-B2 Ecureuil along with improved engine control via a twist grip on the collective-pitch lever.
In North America, this model is commonly known as the AS350-B3 AStar, and it was later also manufactured in American Eurocopter's plant at Golden Triangle Airport in Lowndes County near Columbus, Mississippi. In 2010, a new serialization sequence was started for the AS350-B3, beginning with serial number 7001. The AS350 B3 was produced from 1997 to 2012. The H125 (formerly the AS-350B-3e) replaced it on the market following the end of its production.
There are 1,023 wholly-owned AS350-B3 helicopters in operation worldwide. In addition there are seven in shared ownership and two in fractional ownership (total operational fleet of 1,032). 131 units (or 12.7% of the AS350-B3 in operation fleet) are leased, according to JETNET.
By continent, North America has the largest fleet percentage (39%), followed by Europe (31%) and South America (10%), for a combined total of 80%. Additionally, 46% of the 1,032 AS350-B3 helicopters in operation today are in fleet ownership. The largest fleet operator (Air Methods in Englewood, CO, USA) has 46 helicopters.
Payload & Range
The data contained in Table A are published in the B&CA, May 2015 issue, but are also sourced from Conklin & de Decker. As we’ve mentioned in past articles, a potential operator should focus on payload capability as a key factor. The AS350-B3 ‘Available Payload with Maximum Fuel’ at 708 pounds is slightly less than the Bell 206L-4 at 737 pounds.
In addition, Table A shows the fuel usage by each aircraft in this field of study. The AS350-B3 burns the most fuel at 45 gallons per hour (GPH) of the two comparative helicopters. The Bell 206L-4 is the most frugal (37 GPH) according to Aircraft Cost Calculator.
According to Conklin & de Decker, the AS350-B3 cabin volume is 61 cubic feet and its cabin length is 6.56 ft. The Bell 206L-4 is larger in cabin volume - 73 cu. ft. - but shorter in length at 5 ft. Chart A (courtesy of UPCAST JETBOOK) shows the side-by-side comparisons. The AS350B3 offers a significantly wider, and slightly taller cabin than the Bell 206L-4.
To explain the larger cabin volume for the Bell model, Conklin & de Decker clarifies there are differences between the models. Not included in the calculation is pilot area. It should be noted that the AS350 includes the copilot as a passenger so that portion is included in the cabin volume but the Bell 206 doesn’t. The AS350 also curves while the Bell 206 cabin is square. Lots of space is therefore not countable for the AS350.
As depicted by Chart B and using Centennial Airport, Colorado (home to Air Methods’ 46 unit AS350-B3 helicopter fleet) as the origin point, the AS350-B3 shows more range coverage than the Bell 206L-4, as sourced from Aircraft Cost Calculator (ACC).
Note: The lines depicted do not include winds aloft or any other weather-related obstacles.
The AS350-B3 is powered by a single Turbomeca Arriel 2B engine with the highest power rating value of 847 SHD compared to the Bell 206L-4 helicopter with 726 SHD from its single Rolls-Royce 250-C30P engine. The transmission rating is a limiting factor in the total rated and usable engine power output.
Total Variable Cost
The ‘Total Variable Cost’ illustrated in Chart C is defined as the Cost of Fuel Expense, Maintenance Labor Expense, Scheduled Parts Expense and Miscellaneous Trip Expense. The Total Variable Cost for the AS350-B3 computes at $743 per hour, which is 12.4% more than the Bell 206L-4 ($661 per hour).
Aircraft Comparison Table
Table B contains the pre-owned prices from Vref Pricing Guide for each aircraft. The average speed, cabin volume and maximum payload values are from Conklin & de Decker and B&CA, while the number of aircraft in-operation and percentage ‘For Sale’ are as reported by JETNET.
The AS350-B3 has 5.9% of its fleet currently ‘For Sale’ and the Bell 206L-4 has 5.5% for sale. The average number of pre-owned transactions (sold) per month for the AS350-B3 is higher at five per month than the Bell 206L-4 at four per month, as shown in the last column of the table.
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, 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 are 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 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 helicopters, 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 Airbus AS350-B3 helicopter in private (Part 91) and charter (Part 135) operations over five and seven-year periods, assuming a used retail value of $1.85m, per Vref Pricing guide.
Asking Prices vs Age, Airframe Total Time & Quantity
Chart D, sourced from the Multi-dimensional Economic Evaluators Inc. (www.meevaluators.com), shows a Value and Demand chart for the pre-owned AS350-B3. The current pre-owned market for the AS350-B3 helicopter shows a total of 69 aircraft ‘For Sale’ with 23 displaying an asking price, thus we have plotted them.
We also added the pre-owned Bell 206L-4 in our study group with asking prices ranging from $500k to $2.8m. The equation that we derived from these asking prices and other criteria used should enable sellers and buyers to compare, and perhaps adjust their offerings, if necessary.
Demand and Value are on opposite sides of the same Price axis. Thus, the market for used AS350-B3 and Bell 206 L-4 helicopters responds to at least four features: Years, Useful Load, Quantity, and Asking Prices.
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:
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 the Price, Range, Speed and Cabin Size, we can conclude that the Airbus AS350-B3 displays a high level of productivity.
Popular attributes of the Airbus AS350-B3 are greater range and long-range cruise speed compared to the Bell 206L-4. However, price and the variable cost per hour are higher for the Airbus AS350-B3, and available payload is lower. Thus both helicopters are very strong competitors. Operators should weigh their mission requirements precisely when picking the option that 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, however.
The Airbus AS350-B3 continues to be very popular on today’s market. Those operators in the market should find the preceding comparison useful. Our expectations are that the Airbus AS350-B3, which started delivering in 1997, will continue to do very well in the pre-owned markets for the foreseeable future.