In this month’s Aircraft Comparative Analysis- we provide information on a pair of new and pre-owned business jets in the $14.7- to $15.7-million range for the purpose of valuing the new and pre-owned Bombardier Learjet 60XR. We’ll consider the productivity parameters – including payload- range- speed and cabin size - and cover current and future market values
Aircraft Comparative Analysis – Bombardier Learjet 60XR
In this month’s Aircraft Comparative Analysis- we provide information on a pair of new and pre-owned business jets in the $14.7- to $15.7-million range for the purpose of valuing the new and used Bombardier Learjet 60XR for sale. We’ll consider the productivity parameters – including payload- range- speed and cabin size - and cover current and future market values.
The field compared to the Learjet 60XR in this study includes the Gulfstream G150 for sale. Both the Learjet 60XR and G150 were launched in 2005 and are still in production today.
The original Learjet 60 was announced in October 1990 as the replacement for the midsize Model 55C- from which it is derived. A proof of concept airframe flew for the first time in October 1990 powered by one Garrett TFE331-3A and one PW305 engine. The first Learjet 60 made its first flight from Mid-Continent Airport- Wichita- in June 1991- and certification and early deliveries started at the end of 1992. By mid-1991- Learjet also claimed to have sold the first full-year's production to customers across seven countries.
The Learjet 60- a mid-size cabin- medium-range business jet aircraft is the largest of the Learjet family and incorporated new fuel-efficient engines- a wider- stretched fuselage- a glass cockpit- steer-by-wire nose wheel- and a higher MTOW (optional). Thrust reversers and single-point refueling are also standard equipment- and the aircraft features a full galley- together with an aft toilet.
Production of the Learjet 60 ended in 2007 after 316 aircraft had been built. The Learjet 60XR is the current model in production from Bombardier- which launched this new variant in 2005. The Learjet 60XR has an upgraded cabin- Rockwell Collins Pro Line 21 advanced avionics suite and three disc steel wheel brakes.
Chart A represents the in-operation aircraft Market Share as of November 2013 for the Learjet 60XR (53%) and the G150 (47%) There are currently 213 total aircraft in operation for these two models combined.
Payload and Range
The data contained in Table A is sourced from Conklin & de Decker. As we have mentioned in past articles- a potential operator should focus on payload capability as a key factor. The Learjet 60XR ‘Available payload with Maximum Fuel’ at 944 pounds is greater than that offered by the G150 (850 pounds).
The Cabin Volumes illustrated within Chart B are provided courtesy of Conklin & de Decker. The Learjet 60XR cabin volume at 453 cubic feet is less than the G150 (465 cu ft) by 2.6%.
As mentioned previously- the Learjet 60 has two PW305A engines. The power of each engine is 4-600 pounds of thrust. The G150 is powered by a pair of Honeywell powerplants offering 4-420 pounds thrust each. Table B- sourced from the Aircraft Cost Calculator (ACC)- shows the fuel usage by each aircraft model in this field of study. The Bombardier Learjet 60XR - at 198 gallons per hour (GPH) - uses three gallons per hour (1.5%) more fuel than the G150 (195 GPH).
Using data published in the May 2013 B&CA Planning and Purchasing Handbook and the August 2013 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet A fuel cost in the August 2013 edition was $6.08 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.
Cost Per Mile Comparison
The “Cost per Mile” comparison (Chart C) depicts the Learjet 60XR against its competition using direct costs of flying a 1-000nm mission with 800 pounds (four passengers) payload. The Learjet 60XR- with long-range cruise at an average 423 knots shows the lowest cost per mile at $3.64 per nautical mile. That is 1.6% less to operate than the G150 at $3.70 per nm.
Total Variable Cost Comparison
The “Total Variable costs” - as illustrated in Chart D - is defined as the Cost of Fuel- Maintenance Labor Expense- Scheduled Parts Cost- and Miscellaneous Trip Expenses. The total variable cost for the Learjet 60XR at $1-594 per hour is slightly higher (by 2%) than the Gulfstream G150 at $1-562 per hour.
The points in Chart E center on the same aircraft. Pricing used in the vertical axis is as published in Vref. 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 average speed flown to achieve that range;
3. The cabin volume available for passengers and amenities.
The result is a very large number- so for the purpose of charting each result is divided by one billion. The examples plotted are confined to the aircraft in this study. A computed curve fit on this plot would not be very tight- but when all business jet aircraft are considered the “r” squared factor would equal a number above 0.9. 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 Learjet 60XR is extremely competitive against the G150 with a lower cost per mile and higher available payload with full fuel.
In other areas (cabin volume and variable operating cost) the G150 nudges the Learjet 60XR- however- considering that a Learjet 60XR costs approximately $1million less than the G150- operators should weigh up their mission requirements precisely when picking which option is the best for them.
In Table C are the equipped prices from B&CA for each aircraft. The number of aircraft in-operation- percentage “For Sale” and the number “Sold” over the past 12 months are from JETNET. As shown- the Learjet 60XR has the highest fleet percentage “For Sale” (17.9% - buyer’s market) compared to the G150 (11.9% - buyer’s market). Over the past 12 months the Learjet 60XR shows the largest number of Full Sales Transactions of the two models at 29 versus 23.
Ask Price from AFTT
Chart F- sourced from the Multidimensional Economic Evaluators (MEE) (www.meevaluators.com)- shows a scatter chart of Asking Price vs Airframe Total Time (AFTT) for the Learjet 60XR. The current pre-owned market for the Learjet 60XR shows that there are 20 aircraft For Sale.
However- 14 out of the 20 are ‘Make Offer’ with six showing asking prices. Chart F plots these average asking prices against the AFTT. This Equation reveals that from a Baseline Value of $7.434m- owners give up $900 in Value/Hour of AFTT (for this model).
Depreciation Schedule for Business Aircraft
Aircraft that are used in a trade- business- or for the production of income that are primarily operated domestically- and not used in common or contract carriage may be depreciated over a five-year Modified Accelerated Cost Recovery System (MACRS) schedule. Aircraft used in common or contract carriage (e.g.- Part 135) are depreciable under seven-year MACRS- see Table D.
Table E shows an example of using the MACRS schedule for a new Bombardier Learjet 60XR in private (Part 91) and charter (Part 135) operations over five- and seven-year periods assuming a Vref retail value of $14.7 million.
Location by Continent
Table F- meanwhile- offers a breakdown of the location by continent for the Wholly-Owned Learjet 60XR. North America is home to the majority of the fleet- with 52% of the 103 wholly-owned Learjet 60XR aircraft- followed by Europe at 17%. Currently- one Learjet 60XR aircraft is in shared-ownership and there are eight in fractional-ownership programs.
Within the preceding paragraphs we have touched upon several of the key attributes that business jet operators value. However- there are often other qualities such as service and support that factor in a buying decision- but are beyond the scope of this article.
Using JETNET/AvData information- there are currently 20 pre-owned Learjet 60XR aircraft “For Sale”. The 60XR fares well alongside its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the Learjet 60XR will continue to do well in the used jet market moving forward.