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In this month’s Aircraft Comparative Analysis- we look at a selection of preowned business jets for sale in the $14 to $18-million range for the purpose of valuing the pre-owned Bombardier Challenger 601-3A. Can a CL601-3A successfully compete against aircraft with greater cabin volume- speed- and range? We’ll consider the productivity parameters - payload/range- speed- cabin size and cover current and future market values. ...

Mike Chase   |   1st July 2008
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Mike Chase Mike Chase

Mike Chase has thirty-five year's extensive global managerial experience in marketing,...
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Challenger CL601-1A /3A

Pre-Owned aircraft comparative analysis.

In this month’s Aircraft Comparative Analysis- we look at a selection of preowned business jets for sale in the $14 to $18-million range for the purpose of valuing the pre-owned Bombardier Challenger 601-3A. Can a CL601-3A successfully compete against aircraft with greater cabin volume- speed- and range?

We’ll consider the productivity parameters - payload/range- speed- cabin size and cover current and future market values. The field compared to the CL601-3A in this study includes the Dassault Falcon 2000- Dassault Falcon 50 and Gulfstream Glll.

The Challenger bizjet is a product that grew out of Canadair- a subsidiary of Bombardier- Inc. It was originally developed in the mid- 1970s to be the Learstar 600 in a collaboration between Canadair and Bill Lear of Learjet. However- in 1976 Canadair purchased the Learstar rights and redesigned it to be the Challenger.

Challenger is a long-range executive jet aircraft best recognized for its interior width (only the Falcon 900 is wider by a single inch) that allowed a “walk-about cabin”- a feature not shared by any other business aircraft of the time.

The Challenger was also one of the first Business Jets designed with a supercritical wing- while both thrust reverse and APU are standard on all Challenger models.

Today- there are 78 Challenger 600 business jet aircraft in-operation around the world.

The Challenger 601-1A business jet model is basically a CL600 model fitted with winglets and more powerful General Electric CF34-1A engines offering overall improved performance and reliability. Like the CL600 model- both APU and thrust reversers are standard. However- the model CL600's optional Branson auxiliary fuel tanks come as standard equipment on the CL601-1A.This aircraft can be RVSM certified and- there are as many as 63 Challenger CL601-1A aircraft in-operation today.

Meanwhile- the CL601-3A is a CL601-1A model with the following improvements: CF34-3A engines offering full power maintained to higher outside air temperatures (up to 21°C) via an improved combustion liner and turbine section as compared to its -1A predecessor; Standard Glass Cockpit (Sperry EDZ-800 EFIS) with integrated flight guidance and flight management systems (CAT II certified); Power assisted passenger door; and Twin nose mounted landing lights. Like the CL601-1A- this aircraft can be RVSM certified when service bulletin SB-601-0484 is complied with. There are 133 Challenger CL601-3A aircraft in-operation today. A further development was introduced after the CL601-3A- the -3R. In essence- the CL601-3R is a CL601-3A model with improved CF34-3A1 engines and both the fuselage tailcone tank and 2000 lbs gross weight increase options of the CL601-3A as standard equipment. As with the other two CL601 models- RVSM certification can be achieved when service bulletin SB-601-0484 is complied with. There are 59 Challenger CL601-3R aircraft in-operation today.

However- our focus remains with the CL601-1A/3A- and there are a combined 196 aircraft in-operation around the world today. Of 63 -1As in operation- 39- or 62% have now upgraded to CF34-3A engines.

The data displayed in Table A (top left) appears in the B&CA- May 2008 issue. Additionally- some of the data is courtesy of Conklin & de Decker. As we pointed out in last month’s aviation article- a potential operator should focus on payload capability as a key factor. The CL601-3A available payload with max fuel at 830 pounds provides the lowest amount compared to the competitive aircraft also featured in the table.

The Cabin Volumes illustrated within Chart A (left) are provided courtesy of Conklin & de Decker- and show the cabin volume of the CL601-1A/3A as 1-035 cubic feet - placing it second in the group behind the Gulfstream GIII (1-345 cu ft)- and slightly ahead of the Dassault Falcon 2000 (1-024 cu ft).

As mentioned previously- the CL601-1A has two General Electric CF34-1A engines and the CL601-3A a pair of GE CF34-3A engines- each type offering 8-650 lbst. Among the other aircraft in this comparison the Falcon 50 comes with three Honeywell engines- a pair of General Electric powerplants are used on the Falcon 2000- and two Rolls- Royce engines are utilized in the case of the Gulfstream GIII business jet aircraft.

Using data published in the May 2008 B&CA Planning and Purchasing Handbook and the August 2007 B&CA Operations Planning Guide we will compare our three aircraft. Jet-A fuel cost used in our source publications was $4.69- so for the sake of comparison we’ll chart the numbers as published.

Chart B (left) represents Cost Per Mile- and compares the CL601-3A to its competition using direct costs with all aircraft flying a 1-000nm mission with 800 pounds (four passengers) payload.

The CL601-1A/3A long range cruise (at an average 425 knots) reveals a cost per mile of $6.04 per nautical mile. It is 5.3% less expensive to operate than a Dassault Falcon 50 at $6.38 per nm and 39.8% less than the Gulfstream GIII at $10.03 per nm. The Falcon 2000 offers the lowest cost per mile ($4.68 per nm) of the aircraft listed in this comparison.

The Total Variable costs - illustrated in Chart C (top right) - is defined as the cost of Fuel Expense- Maintenance Labor Expense- Scheduled Parts Cost- and miscellaneous trip expenses. The total variable cost for the CL601-3A at $2-533 per hour is lower than that of the Falcon 50 at $2-599 per hour and the Gulfstream GIII at $4-268 per hour- but higher than the Falcon 2000- which comes in at $2-001.

The points in Chart D (right) represent the same aircraft referred to previously. Pricing used in the vertical axis is as published in the B&CA 2008 Purchase Planning Handbook. 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 CL601-1A/3A business jet is still competitive against other equivalent-sized business jets. In fact- of the categories displayed in Table B (see previous page)- the CL601- 1A / 3A ranked first in the number of used aircraft sold over the past 12 months compared to the competitors according to data sourced from JETNET. Also shown in Table B are the relative retail prices from B&CA for each aircraft. The number of aircraft inoperation- percentage “For Sale” and the number “Sold” over the past 12 months are from JETNET.

Within the preceding paragraphs we have briefly covered several of the attributes that business aircraft operators value. There are other qualities such as airport performance- terminal area performance- and time-toclimb performance however.

Again using JETNET/AvData information- there are currently 34 or 17.3% of the combined pre-owned CL601-1A/3A models “For Sale”. Of those 34- seven have upgraded CF34-3A engines. The CL601-1A/3A fares well compared to its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the CL601-1A/3A- which started delivering in 1983- will continue to do well in the pre-owned market 25 years and more down the line.

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.aero


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