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AIRCRAFT COMPARATIVE ANALYSIS - FALCON 7X

In this month’s Aircraft Comparative Analysis- we’ll provide information on a selection of pre-owned business jets in the $40m-$48.6m range for the purpose of valuing the new and preowned Dassault Falcon 7X aircraft. The current New/Used percentage split for the Falcon 7X aircraft is 96% new- and 4% preowned.

Mike Chase   |   1st November 2010
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Dassault Falcon 7X

In this month’s Aircraft Comparative Analysis- we’ll provide information on a selection of pre-owned business jets in the $40m-$48.6m range for the purpose of valuing the new and preowned Dassault Falcon 7X aircraft. The current New/Used percentage split for the Falcon 7X aircraft is 96% new- and 4% preowned.

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 Gulfstream G500- and Bombardier Global 5000.

Can the three-engine Falcon 7X successfully compete against the twin-engine Gulfstream G500 and Global 5000 that each offer greater cabin volume? This is one of the questions that we will seek to answer in this month’s Aircraft Comparative Analysis report.

BRIEF HISTORY
The Falcon 7X flies faster- farther and higher than any Falcon ever built. Three Pratt & Whitney PW307A engines power the Falcon 7X. Dassault received its FAA and EASA Type Certificate for the aircraft in April 2007- and the first 7X entered service on June 15- 2007.

The Falcon 7X is the first fully fly-by-wire business jet. It is also equipped with the same avionics suite- the Honeywell Primus EPIC 'Enhanced Avionics System' (EASy) that was used on the Falcon 900EX and later on the Falcon 2000EX.

The Falcon 7X is notable for its extensive use of computer-aided design- the manufacturer claiming it to be the 'first aircraft to be designed entirely on a virtual platform'- using Dassault Systems' CATIA and PLM products. The Falcon 7X is also unusual in having an S-duct central engine- and is one of only two tri-jets currently in production- the other being the Dassault Falcon 900.

MARKET SHARE
As shown in Chart A (top- left)- the Market Delivery percentage share in September 2010 has the Falcon 7X at 47% and the Bombardier Global 5000 at 48%.

PAYLOAD AND RANGE
The data contained in Table A (middle left) is published in the Business & Commercial Aviation (B&CA) May 2010 issue- and is 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 7X aircraft ‘Available payload with Maximum Fuel’ at 1-660 lbs falls between the 2-660 lbs offered by the G500 and the 1-120 lbs offered by the Global 5000 aircraft.

CABIN VOLUME
According to Conklin & de Decker- the cabin volume of the Falcon 7X at 1-552 cubic feet is smaller than both the G500 (1-669 cubic feet) and the Global 5000 (2-022 cubic feet)- as shown in Chart B (bottom- left).

POWERPLANTS
Powered by three Pratt & Whitney Canada PW307A engines- the Falcon 7X powerplants each offer 6-402 lbst. The competitor aircraft are both powered by two Rolls-Royce engines- but with greater thrust at 15-385 lbst for the G500 and 14-750 lbst for the Global 5000.

COST PER MILE COMPARISONS
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: Fuel price used from this source does not represent an average price for the year.

Chart C (top- right) details “Cost per Mile”- and compares the Falcon 7X to its competition factoring direct costs and with all aircraft flying a 1-000nm mission with an 800 pound (four passengers) payload. The Falcon 7X at $4.76 cost per mile is lower than the G500 at $5.32 and the Global 5000 at $6.12.

TOTAL VARIABLE COST COMPARISONS
The ‘Total Variable Cost’- illustrated in Chart D (middle 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 Falcon 7X at $2-085 is less than the G500 and Global 5000.

PRODUCTIVITY COMPARISONS
The points in Chart E (bottom- 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 Falcon 7X- as shown in the productivity index Chart E- is productive.

The overall price of the Falcon 7X is considerably more than the Gulfstream G500 and Bombardier Global 5000. Although the Falcon 7X has less cabin volume- it is less expensive to operate on a cost per mile and variable cost basis than the competitor’s in this field of study - which- over a period of several years- would narrow the initial additional investment in the aircraft.

Table B (top- 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 in-operation and percentage ‘For Sale’ are reported by JETNET.

It should be noted that currently there are no Falcon 7X aircraft in operation that are for sale. However- there are five delivery positions in 2011 and 2012 that have been listed for sale- creating the 5% reported here.

Table C (middle- right) shows that more than half the 77-strong wholly-owned Falcon 7X fleet is based in Europe (53% or 41 aircraft)- followed by North America (37% or 28 aircraft).

AIRPORT PERFORMANCE
The airport performance is illustrated in Table D (bottom right) and includes airport Take-Off Field Length (TOFL)- Landing- and Balanced Field Length. The Falcon 7X is again reasonably competitive.

SUMMARY
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 to altitude levels that might factor in a buying decision- too- however.

Operators in the market should find the preceding comparison of value. Our expectations are that the Falcon 7X aircraft will do 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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