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In this month’s Aircraft Comparative Analysis- we provide information on a selection of pre-owned business jets in the $0.95-$3.8 million range for the purpose of valuing the new and pre-owned Embraer Phenom 100 aircraft. The current New/Used percentage split for the Phenom 100 aircraft is 78.5% new and 21.5% pre-owned.

Mike Chase   |   1st October 2010
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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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Embraer Phenom 100

In this month’s Aircraft Comparative Analysis- we provide information on a selection of pre-owned business jets in the $0.95-$3.8 million range for the purpose of valuing the new and pre-owned Embraer Phenom 100 aircraft. The current New/Used percentage split for the Phenom 100 aircraft is 78.5% new and 21.5% pre-owned.

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 the Eclipse EA 500- and Cessna’s Citation Mustang and Citation CJ2.

Can the Phenom 100 successfully compete against a light aircraft (CJ2) with greater cabin volume- speed- and range? How will the Phenom 100 compare with the Citation Mustang and Eclipse 500? These are two questions that we will seek to answer in this month’s Aircraft Comparative Analysis.

Embraer’s Phenom 100 has a capacity for four passengers in its normal configuration- but it can carry up to 6-7 passengers with a single pilot. Interior configurations also offer options of a side-facing seat and belted toilet. Following are some milestones in the aircraft’s short history to date:

• July 26- 2007: First flight of Phenom 100.
• December 9- 2008: Brazil's Civil Aviation Authority (ANAC) type certification.
• December 12- 2008: FAA type certification.
• December 24- 2008: First delivery of a Phenom 100 to a private customer.
• April 24- 2009: EASA type certification.

The Phenom 100 is powered by two Pratt & Whitney PW617F-E engines and utilizes the Garmin G1000 Avionics system that is renamed the “Prodigy” Flight Deck 100.
Note: Production of the Eclipse 500 was halted in mid-2008 due to lack of funding. There followed a filing for bankruptcy and closure. Eclipse is under new ownership with a long-term goal to renew production (targeted for the first half of 2011).

The industry has now produced 715 Entry Level Jets (Chart A- left). However- there is little evidence of the development of the expected Air Taxi market factoring these aircraft - see Table A (left).

The Phenom 100 has sold no aircraft to an air taxi owner/operator and just 5.4% of the active fleet have gone to Charter companies (from a total active fleet of 149 aircraft). By comparison- both the Mustang and Eclipse show a little more than 1% of their active fleet is being utilized in air taxi operations.

The data contained in Table B (left) is published in the B&CA- May 2010 issue- and also sourced from Conklin & de Decker. As we mentioned in past articles- a potential operator should focus on payload capability as a key factor. The Embraer Phenom 100’s ‘Available payload with Maximum Fuel’ at 580 lbs compares to 600 lbs for the Mustang and 502 lbs for the Eclipse 500 aircraft. By comparison- the CJ2 offers 668 lbs.

According to Conklin & de Decker- the cabin volume of the Embraer Phenom 100 at 208 cubic feet is greater than both the Eclipse 500 at 160 cubic feet and the Cessna Mustang at 144 cubic feet- as shown in Chart B (left). It is just 40 cu ft smaller than the Citation CJ2.

Powered by two Pratt & Whitney Canada PW617F-E engines- the Phenom 100’s powerplants each offer 1-695 pounds of thrust. Two of the competitor aircraft are also powered by two Pratt engines- but with less thrust at 1-460 lbst for the Mustang and 900 lbst for the Eclipse 500. The Citation CJ2- meantime- has the greatest lbst- each of its Williams FJ44-2C powerplants offering 2-400 pounds.

Using data published in the May 2010 B&CA Planning and Purchasing Handbook and the August 2010 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet-A fuel cost used from the August 2010 edition was $4.90 per gallon at press time- 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.

Chart C (right) details “Cost per Mile”- and compares the Phenom 100 to its competition factoring direct costs and with all aircraft flying a 600nm mission with an 800 pound (four passengers) payload. The Phenom 100 at $2.10 cost per mile is lower than the Mustang at $2.19 but higher than the Eclipse 500 at $1.79. For perspective- the CJ2 costs $2.75 per mile.

The ‘Total Variable Cost’- illustrated in Chart D (right)- is defined as the cost of Fuel Expense- Maintenance Labor Expense- Scheduled Parts Expense- and Miscellaneous Trip Expense. The total variable cost for the Phenom 100 at $686 is more than the Eclipse 500 or the Mustang.

The points in Chart E (right) center on the same aircraft. Pricing used in the vertical axis is as published in the B&CA August 2010 Operations Planning Guide 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.

After consideration of the Price- Range- Speed and Cabin Size- we can conclude that the Phenom 100- as shown in the productivity index on Chart E- is highly productive compared with its competitors.

Table C (right) contains the average retail prices from Vref for each aircraft with the latest model produced with the price year in parentheses. The average speed- cabin volume and maximum payload values are from Conklin and De Decker and B&CA magazine. The number of aircraft inoperation and percentage ‘For Sale’ are reported by JETNET.

The major based-at locations for the Phenom 100 are the United States- where 50% of the fleet resides- followed by South America at 32%- see Table D (right).

The airport performance is illustrated in Table E (bottom- right) and includes airport take-off field length (TOFL)- Landing- and Balanced Field Length. The Phenom 100 is again competitive based on these airport performance criteria.

Within the preceding paragraphs we have touched upon several of the attributes that business aircraft operators value. There are other qualities such as terminal area performance- time to climb performance- and maximum transition altitude levels that might factor in a buying decision- too- however.

The Embraer Phenom 100 fares well against its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the Phenom 100 aircraft will do very well in the pre-owned market.

For more information: Michael Chase is president of Chase & Associates- and can be contacted at 1628 Snowmass Place- Lewisville- TX75077; Tel: 214-226-9882; Web: www.mdchase.com

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