In this month’s Aircraft Comparative Analysis, Mike Chase provides information on a pair of used Mid-Size Jets for sale with the purpose of valuing the Cessna Citation Excel.
Over the following paragraphs, we’ll analyse the performance of the Cessna Citation Excel and Bombardier Learjet 40 airplane 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 Citation Excel is a growth/derivative of the Citation V Ultra, offering a shortened Citation X stand-up cabin and a lengthened Citation V wing, and was produced between 1998 and 2004.
The PW545A engines make the Citation Excel faster than the V Ultra, and give it a higher MGTOW and a longer range. The avionics suite includes a Honeywell Primus 1000 flight guidance system and a single AlliedSignal flight management system.
There are 312 wholly-owned Citation Excels, 40 that are fractionally-owned and 17 under shared-ownership, making a total fleet of 369 in operation worldwide. Thirty-five units, or 9.5% of the Citation Excel fleet is leased, according to JETNET.
The percentage ‘For Sale’ is just 6%, with 75% of those aircraft under an exclusive broker agreement. The average days on the market before a Citation Excel sells is currently 221 days. By continent, North America holds the largest fleet percentage (80%), followed by Europe (9%) and South America (7%), to give a combined total in those continents of 96% of the global fleet.
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 Citation Excel ‘Available payload with Maximum Fuel’ (960 lbs) is significantly less than that offered by the Learjet 40 (1,507 lbs).
Table A also shows the fuel usage by each aircraft (sourced from Aircraft Cost Calculator). There is a difference of 39 gallons per hour (21%) between the fuel usage of the Citation Excel at 225 GPH and the more frugal Learjet 40 at 186 GPH.
According to Conklin & de Decker, the Citation Excel cabin volume is 422 cubic feet, with 18.5 ft. cabin length. The Learjet 40 has less cabin volume (369 cu. ft.) and shorter cabin length at 17.67 ft. Chart A, courtesy of UPCAST JETBOOK, offers a cabin cross-section comparison and shows the Citation Excel has greater width (5.5 ft. vs 5.12 ft.) and greater height (5.7 ft. vs 4.92 ft.) than the Learjet 40.
Chart B, using Wichita, Kansas as the origin point, shows that the Citation Excel offers less range coverage than the Learjet 40, per data from Aircraft Cost Calculator (ACC).
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 200nm alternate. The lines depicted do not include winds aloft or any other weather-related obstacles.
Cost Per Mile
The Citation Excel is powered by two Pratt & Whitney Canada PW545A engines each offering 3,991 lbst, while the Learjet 40 is powered by two Honeywell TFE 731-20AR engines with 3,500 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 Citation Excel to its competition, factoring direct costs and with each aircraft flying a 1,000nm mission with an 800 pound (four passengers) payload. The Learjet 40 shows the lowest cost per nautical mile at $3.14 compared to $4.23 for the Citation Excel – a significant difference of $1.09 in favor of the Learjet 40.
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 Citation Excel computes at $1,693 per hour, which is significantly greater than the Learjet 40 at $1,367 per hour.
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 Aircraft Cost Calculator, while the number of aircraft in-operation and percentage ‘For Sale’ are as reported by JETNET.
The Citation Excel has 6% of its fleet currently ‘For Sale’ and the Learjet 40 is at 18.4% ‘For Sale’. The average number of pre-owned transactions (sold) per month for the Citation Excel is more at five units per month compared to the Learjet 40 at one.
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 2004-model Citation Excel business jet in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a used retail price of $3.4m, per Vref Pricing guide.
Asking Prices & Quantity
The current used jet market for the Citation Excel shows a total of 20 aircraft ‘For Sale’ with six displaying an asking price ranging from $1.5 million to $3.7 million. We also reviewed the used Learjet 40, which display asking prices ranging from $1.55m to $3.5m.
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 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 Citation Excel displays a high level of productivity.
The Citation Excel shows higher retail price, but greater productivity compared to the Learjet 40. The Learjet 40 has a very large operating cost advantage, higher cruise speed and higher payload with full fuel capability, but the Citation Excel offers a substantially larger cabin with Mid-Size Jet cross-section.
The used Citation Excel jet shows good monthly full retail sale transactions averaging five units per month, and is still a very popular model within the fractional ownership sector.
Operators should weigh up their mission requirements precisely when picking which option is the best for them.
Maximum Scheduled Maintenance Equity
Exclusive to our online content, the following chart displays the Citation Excel and depicts the Maximum Maintenance Equity available, based on the aircraft's age.
The Maximum Maintenance Equity figure was achieved the day the aircraft came off the production line (since it had not accumulated any utilization toward any maintenance events). The percentage of the Maximum Maintenance Equity that an average aircraft will have available based on its age, assumes:
* Average annual utilization of 350 Flight Hours
* All maintenance is completed when due.
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 Cessna Citation Excel jet continues to be popular today. Those operators in the market should find the preceding comparison useful. Our expectations are that the Citation Excel will continue to do well on the used jet sales market for the foreseeable future.
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