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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 $24 to $29- million range for the purpose of valuing the pre-owned Dassault Falcon 2000. Can a Falcon 2000 aircraft successfully compete against aircraft with greater 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 Falcon 2000 in this study includes the Bombardier Challenger 604 aircraft for sale- Challenger 300 and Gulfstream G200.

BRIEF HISTORY
Dassault introduced the Falcon 2000 as the Falcon X in 1989. The development of the aircraft was carried out by Dassault in partnership with Alenia- and first flight came in 1993. Two years later- in 1995- the Falcon 2000 entered service.

The Falcon 2000 is a twin-engine Frenchmade business jet- and is essentially a slightly smaller development on the Falcon 900 trijet- with transcontinental range. It features a large stand-up cabin- two CFE-738-1-1B General Electric/Honeywell engines and a Rockwell Collins Pro Line 4 integrated avionics suite. This aircraft can be RVSM certified when Service Bulletin SB-063 is complied with.

Following the Falcon 2000- the Falcon 2000EX took its maiden flight in October 2001- received US (FAA) and European (JAA) flight certification in March 2003 and entered service in May 2003. The Falcon 2000EX offers 25 percent greater range (over 4-000nm) in a six-passenger configuration - while maintaining or improving the other performance qualities that have driven the success of the Falcon 2000. This improved performance is due to a new powerplant (two PW308C jets totaling 7-480 pounds of thrust) and increased fuel capacity.

Next came the Falcon 2000EX EASy - offering the new EASy flight deck- and first flown in January 2003. US (FAA) and European (JAA) certification followed in June 2004.

In October 2005- Dassault announced yet another development on the original- with the Falcon 2000DX. The 2000DX will replace the Falcon 2000- with deliveries underway during 2008- and over 300nm or 9.9% range improvement offered to customers.

In May 2006- Dassault announced the Falcon 2000LX- which will have blended winglets designed by Aviation Partners for increased fuel efficiency. The 2000LX will replace the Falcon 2000EX from 2010. For Falcon 2000EX deliveries in 2008/2009- winglets will be available as an option.

NEW AND PRE-OWNED FALCON 2000 DELIVERIES
With the Falcon 2000 in-operation since 1995- new deliveries according to our GAMA source- peaked at 35 in the years 2001 and 2002- but have steadily decreased to just one in 2007 as shown in Table A (left on digital version). However- in 2007 the Falcon 2000EX EASy delivered 33 aircraft to continue the family line- and the Falcon 2000DX begins deliveries this year.

On the ‘Pre-Owned’ side- the year 2006 proved to be the peak year with 34 full-sale transactions according to JETNET/AvData. As displayed in Chart A (left on digital version)- since 2001 the preowned Falcon has shown an increasing step by step cyclical pattern with several peaks and troughs. In 2007- a decrease to 30 full-sale transactions was off slightly from the previous year- but still was the second highest year ever for pre-owned Falcon 2000 aircraft sales.

PAYLOADS AND RANGES
The data contained in Table B (left on digital version) is published in the B&CA- May 2008 issue- but also sources information from Conklin & de Decker. As we mentioned- a potential operator should focus on payload capability. The Falcon 2000 “Available Payload with Maximum Fuel” in pounds at 1-095 pounds is 168 pounds or 15% less than the Challenger 604 at 1-263 pounds- and ranks third in the group.

CABIN VOLUMES
According to Conklin & de Decker- the cabin volume of the Falcon 2000 at 1-024 cubic feet is -12.3% less than the Challenger 604 at 1-150 cubic feet- but the Falcon 2000 has 18% to 19% more cabin volume than either the Gulfstream G200 or Challenger 300 (see Chart B (left) on digitalversion).

POWERPLANT DETAILS
As mentioned previously- the Falcon 2000 has two CFE-738-1-1B General Electric engines each offering 5-918 pounds of thrust. By comparison- the Challenger 604 is also powered by two General Electric engines - the CF34-3B model - but these have substantially greater thrust at 8-729 pounds. The Challenger 300 utilizes Honeywell engines with 6-826 pounds of thrust and the Gulfstream G200 has Pratt & Whitney Canada engines with 6-040 pounds of thrust.

Using data published in the May 2008 B&CA Planning and Purchasing Handbook and the August 2008 B&CA Operations Planning Guide we will compare our four aircraft. Jet-A fuel cost used in our source publications was $6.57 per gallon- so for the sake of comparison we’ll chart the numbers as published.

COST PER MILE COMPARISONS
Chart C (right)- which details “Cost per Mile”- compares the Falcon 2000 to its competition factoring direct costs and with all aircraft flying a 1-000nm mission with 800 pounds (four passengers) payload. The Falcon 2000 long range cruise at an average 430 knots shows the cost per mile comparisons at $5.97 per nautical mile- which is 24% less expensive to operate than a Challenger 604 at $7.85 per nm but 23% more than the Challenger 300 at $4.85 per nm. The Gulfstream G200 has the lowest cost per mile at $4.70 per nm of the aircraft listed in this comparison.

TOTAL VARIABLE COST COMPARISONS
The “Total Variable costs” 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 Falcon 2000 at $2-555 per hour is 20% less to operate than the Challenger 604 but more expensive than the Challenger 300 and the Gulfstream G200.

PRODUCTIVITY COMPARISONS
The points in Chart E (right) center around the same group of aircraft (but as a matter of interest- we’ve included the other aircraft in the Falcon 2000 series). 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 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 Falcon 2000 business jet can be very competitive against other equivalent-sized business jets- but trails behind on the index compared to the Challenger 604 due- largely- to less range and less cabin volume. The Falcon 2000DX- EX EASy- and LX versions of this aircraft family demonstrate how Dassault is closing the index gap on the CL604.

MARKET SHARE COMPARISONS
In our next article- we will continue this index comparison plot to include the Challenger 605 as we feature the CL604 aircraft. In the meantime- Chart F (left) shows the Market Share comparisons of these two competitors with the Challenger 604/605 holding the delivery lead at 53% market share with 402 deliveries at the end of 2007. Combined- both companies have delivered 760 aircraft in this market segment. By the end of 2008 and beyond- we might see the market share lead change in favor of Dassault as the new Falcon 2000DX and LX models come onto the market in earnest. Time will tell - but we will certainly witness a continued battle between these two strong competitors.

In Table C (left) are the relative retail prices from B&CA and from Vref for each aircraft. The number of aircraft in-operation- percentage “For Sale” and the number “Sold” over the past 12 months are from JETNET. We did not include the Falcon 2000EX and EX EASy in this table- but re-focus specifically on the Falcon 2000 which has just ended production. As the newer replacement Falcon 2000DX enters service- it should afford new pre-owned sales opportunities as many Falcon 2000 owners/operators upgrade.

SUMMARY
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- however.

Using JETNET/AvData information- there are currently 14 or 6.1% of the pre-owned Falcon 2000 models “For Sale”. The Falcon 2000 fares well alongside its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the Falcon 2000- which started delivering in 1995- will continue to do well in the pre-owned market in the near-term- especially in the next several years as the new production Falcon 2000DX replacement aircraft enters the market.

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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