In this month’s Aircraft Comparative Analysis- we provide information on a selection of Pre-Owned and New Business jets in the $2.6-5.1 million range for the purpose of valuing the pre-owned Cessna CJ1.Back to Articles
CESSNA CITATION CJ1
In this month’s Aircraft Comparative Analysis- we provide information on a selection of Pre-Owned and New Business jets in the $2.6-5.1 million range for the purpose of valuing the pre-owned Cessna CJ1.
We’ll consider the usual productivity parameters - payload/range- speed and cabin size - and cover current and future market values. The field in this study includes an all-Cessna line up- including the CJ1+- the CJ2 and the Citation Mustang.
As of this writing- the final CJ1+ aircraft is scheduled for delivery in September. This news leaves a gap between the Mustang and CJ2+ aircraft on the Cessna aircraft production line - but that gap can be easily filled with a pre-owned CJ1 or CJ1+. So this article will look to provide some insights about the pre-owned CJ1 aircraft.
The CitationJet (Model 525) and its subsequent incarnations (the CJ1- CJ1+- CJ2- CJ2+- CJ3- and the CJ4 models) are low-wing aircraft with T-tail pressurized cabins- and are powered by two turbofan engines pylon-mounted on the rear fuselage. Specifically- the Cessna Citation CJ1 (and subsequently the CJ1+) is the same as the Citation 525 except that they offer increased maximum ramp- take-off- and landing weights. The CJ1 model is classified in the Light Jet category- with six seats and an enclosed lavatory.
The CJ1 aircraft can be RVSM certified when Service Bulletin SB-525-34-40 is complied with. The CJ1 was first delivered in 2000 and ended production in 2004. The CJ1+- an upgraded version of the CJ1 offering extra payload and range replaced it- but as mentioned above will now cease production.
The CJ1+ is an extremely fuel-efficient business jet- burning an average of 132 gallons per hour (slightly lower than the CJ1) even though the CJ1+ has a slightly higher payload.
PAYLOAD AND RANGE
The data contained in Table A is published in the B&CA- May 2011 issue- but is also sourced from Conklin & de Decker. As we mentioned in past articles- a potential operator should focus on payload capability. The Citation CJ1 “Available payload with Maximum Fuel” at 430 pounds is the smallest value compared to the other Cessna Citations. The payload increased to 545 pounds with the CJ1+- but is still smaller than that of the Mustang and CJ2.
According to Conklin & de Decker- the cabin volume of the Citation CJ1 and CJ1+- at 198 cubic feet- each is larger than the Mustang at 144 cubic feet- but fully 25% smaller than the Citation CJ2 at 248 cubic feet (see Chart A).
The Citation CJ1 aircraft utilizes two Williams FJ44-1A engines each offering 1-900 pounds of thrust. The CJ1+ gets its additional payload and range capacity from a slightly different powerplant derivative - a pair of Williams FJ44-1AP engines that offer the same 1-900 pounds of thrust as the -1As. The CJ2 employs two Williams FJ44-2C engines at 2-400 pounds of thrust- while the Mustang is powered by two Pratt & Whitney Canada PW615F engines - each offering less thrust at 1-460 lbst.
Using data published in the May 2011 B&CA Planning and Purchasing Handbook and the August 2010 B&CA Operations Planning Guide we will compare our aircraft. Jet-A fuel cost was $4.90 per gallon at press time for the August 2010 edition- so for the sake of comparison we’ll chart the numbers as published.
Note: The fuel price used from this source does not represent an average fuel price for the year.
Sourcing information from a new software program called Aircraft Cost Calculator (ACC) we compared the fuel consumption (gallons per hour) of each of the aircraft in this field of study (see Table B). This tool is designed to enable you to quickly analyze- compare- simplify and customize any fixed or variable cost that will provide accurate operating numbers specific for your own aircraft and/or flight department.
The Citation Mustang at 90 gallons per hour (GPH) leads the rest of the field as the most frugal- followed by the CJ1+ aircraft at 132 GPH. The CJ1 burns approximately 134 GPH while the CJ2 (at 141 GHP) burns the most fuel.
COST PER MILE COMPARISONS
Chart B- which details “Cost per Mile”- compares the Citation CJ1 to its competition factoring direct costs and with all aircraft flying a 600nm mission with an 800 pound (four passengers) payload. Both the CJ1 and CJ2 models have greater cost per mile comparisons - each at $2.75 each. The newer CJ1+ (at $2.53) and the Mustang (at $2.19) cost less to operate per mile.
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 two newer aircraft - the CJ1+ at $902 and the Mustang at $678 per hour are considerably less expensive to operate compared to the two older-generation aircraft. The CJ2 has the highest variable cost per hour of the competitive aircraft ($1-021 per hour followed by the CJ1 at $924 per hour).
The points in Chart D center on the same group of aircraft. Pricing used in the vertical axis is as published in the B&CA 2008 Purchase Planning Handbook and 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 long range cruise 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.
LOCATION BY CONTINENT AND UPGRADE REPORTS
Compiled from JETNET’s STAR reporting system- the data in Table D can be valuable information for dealer/broker repeat business. The major based at locations for the Citation CJ1 and CJ1+ are in the United States and Europe. 82% of the CJ1 fleet is based in Europe and North America- and 88% of the CJ1+ fleet is based in Europe and North America.
An owner that started with a CJ1 in four out of the Top 5 cases upgraded to a Citation CJ1+- CJ2- CJ2+- or a CJ3 model as shown in Table E.
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 performance that might factor in a buying decision- too- however.
The CJ1 pre-owned markets of 2009 and 2010 were at higher levels than they are now- with aircraft taking longer to sell- and at lower asking prices (according to JETNET).
The inventory has since decreased over the course of the First Quarter of 2011 from 44 to 36 CJ1s for sale. That’s 12 full-sale transactions for the quarter- which is almost equal to the total number of CJ1s sold throughout 2010 (14 full-sale transactions recorded throughout the year). By comparison- there were 18 CJ1+ aircraft for sale- with one full-sale transaction during the First Quarter.
Average days on the market (DOM) for the CJ1 have increased although asking prices remain at around 2009/2010 levels at $2.6m (Vref). The First Quarter 2011 result for the CJ1 aircraft is certainly a good sign that the light jet market may have hit bottom and is now fighting its way back into the preowned marketplace. We will continue to monitor the CJ1 aircraft progress as the pre-owned market unfolds in the remaining quarters of 2011.
The Cessna Citation CJ1 aircraft fares well against its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the Citation CJ1 aircraft will continue to do very well in the pre-owned market as it slowly climbs out of the recent recession.
For more information: Michael Chase is president of Chase & Associates- and can be contacted at 1628 Snowmass Place- Lewisville- TX 75077; Tel: 214-226-9882; Web: www.mdchase.com