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In this month’s Aircraft Comparative Analysis- we provide information on a selection of new/pre-owned business jets in the $20 to $23- million range for the purpose of valuing the pre-owned Cessna Citation X. Can a Citation X - the fastest corporate jet in the world - successfully compete against aircraft with greater cabin volume and range? We’ll consider the productivity parameters - payload/range- speed and cabin size- and cover ...

Mike Chase   |   1st August 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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Cessna Citation X
Pre-Owned aircraft comparative analysis.

In this month’s Aircraft Comparative Analysis- we provide information on a selection of new/pre-owned business jets in the $20 to $23- million range for the purpose of valuing the pre-owned Cessna Citation X. Can a Citation X - the fastest corporate jet in the world - successfully compete against aircraft with greater cabin volume and range?

We’ll consider the productivity parameters - payload/range- speed and cabin size- and cover current and future market values. The field compared to the Citation X in this study includes the new Hawker 4000- Challenger 300 executive jet aircraft- and Gulfstream G200.

The Cessna Citation X business jet is a medium-sized business jet. Several aircraft within the Citation family preceded it- but this is a clean sheet design not derived from a previous model. The development of the airplane was first announced in October 1990- but a period of six years elapsed before the company could meet several specifications required to obtain certification. The first aircraft was eventually delivered in June 1996.

For more than 20 years- the Citation line was known as a well-handling but slow aircraft range. Cessna engineers emphasized practicality and good handling characteristics. Indeed- the Citation X broke the mold of the typical Citation aircraft when it became the fastest corporate jet in the world. The Citation X offers a top speed of 0.92 Mach with a maximum flight altitude of 51-000 feet. It is powered by two Rolls-Royce/Allison AE3007C1 engines- which makes it the first Cessna aircraft to be powered by a Rolls-Royce engine.

It is presently the largest and most powerful Citation aircraft built- featuring a 37-degree swept wing- a Honeywell Primus 2000 flight guidance system and a stand-up cabin. All models of this aircraft can be RVSM certified when Service Bulletin SB-750- 34-05 is complied with.

The Citation X has been in-operation since 1996. New deliveries peaked at 34 in the year 2000 and have steadily decreased- except in 2007 when they increased to 17 from 12 in the prior year. The 2007 ‘New’ Citation X deliveries at 17 still represented only half of what they amounted to in the year 2000- however.

On the ‘Pre-Owned’ side- prior to 2007- the years 2002 and 2005 were peak years for full-sale transactions - and 37 aircraft were sold in both years. As shown in Chart A (left)- since 2002 the pre-owned Citation X has shown some rather steep cyclical patterns with several peaks and troughs. In 2007- though- a new record peak was reached for the Citation X with 54 full sale transactions.

The data contained in Table A (left) is published 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 article- a potential operator should focus on payload capability. The Citation X available payload with max fuel in pounds stands at 1-444 pounds - nearly the same as the Challenger 300 in the middle of the pack.

The cabin volume of the Citation X is 593 cubic feet. The “Cabin Volumes” illustrated within Chart B (left) are provided courtesy of Conklin & de Decker. As indicated in the chart- the 593 cubic feet offered by the Citation X is considerably smaller than the other comparative aircraft.

As mentioned previously- the Citation X has two Rolls-Royce AE3007C1 engines. The power of each engine is 6-764 pounds of thrust. The other aircraft in this comparison have engines that are powered by Honeywell (Challenger 300) and by Pratt & Whitney Canada (Gulfstream G200 corporate aircraft and Hawker 4000) that range from 6-040 to 6-900 pounds of thrust.

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 four 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.

The “Cost per Mile” chart (Chart C- right) compares the Citation X to its competition using direct costs and all flying a 1-000nm mission with 800 pounds (four passengers) payload. The Citation X’s long range cruise at an average 470 knots and the fastest speed of the aircraft listed- shows the cost per mile comparisons at $4.24 per nautical mile. It is 3.7% more expensive to operate than a Hawker 4000 at $4.09 per nm and 13.8% more than the Challenger 300 at $3.76 per nm. The Gulfstream G200 has the lowest cost per mile at $3.61 per nm of the aircraft listed in this comparison.

The “Total Variable costs” - as illustrated in Chart D (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 Citation X corporate aircraft at $2-121 per hour is the highest cost compared to the others.

The points in Chart E represent the same group of aircraft. 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;
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 for sale 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 Citation X business jet can be very competitive against other equivalent-sized business jets- but trails behind on the index due to lower range and cabin volume. In fact- of the categories displayed in the Comparison Table B (overleaf)- the Citation X ranked first for long-range cruise speed- and continues to record strong aircraft sales over the past 12 months in line with the competitors shown in the table from the data sourced from JETNET. Also shown in Table B are the relative retail prices from B&CA magazine for each aircraft. The number of aircraft in-operation- percentage “For Sale” and the number “Sold” over the past 12 months are from JETNET/AvData.

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 to climb performance that might factor in a buying decision.

Using JETNET/AvData information- there are currently 23 or 8% of the pre-owned Citation X models “For Sale”. The Citation X fares well alongside its competition- so those operators in the market should find the preceding comparison of value.

Our expectations are that the Citation X- which started delivering in 1996- will continue to do well in the pre-owned market- especially in the next several years. While new production replacement aircraft are being  announced by Cessna- Bombardier (Learjet 85)- Embraer (Legacy models)- as well as Dassault and Gulfstream - the first of these newly announced aircraft will not be coming to market until 2012- and that leaves some excellent opportunities for pre-owned Citation X sales in the meantime.

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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