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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 $18-33 million range for the purpose of valuing the pre-owned Gulfstream GIV and GIV-SP. We’ll consider the productivity parameters - payload/range- speed and cabin size- and cover current and future market values. The field compared to the Gulfstream GIV and GIV-SP in this study includes the Bombardier ...

Mike Chase   |   1st November 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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Gulfstream GIV & GIV-SP
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 $18-33 million range for the purpose of valuing the pre-owned Gulfstream GIV and GIV-SP.

We’ll consider the productivity parameters - payload/range- speed and cabin size- and cover current and future market values. The field compared to the Gulfstream GIV and GIV-SP in this study includes the Bombardier Challenger 604 and Dassault Falcon 900.

Brief History
Design work on the GIV began in early 1983- with the first of four production prototypes making first flight on September 19- 1985. FAA certification was awarded on April 22 1987. The improved Gulfstream GIV-SP (SP representing Special Performance)- with higher payload and landing weights and improved payload range performance- replaced the GIV from September 1992- (there is- however- an ASC190 that allows an owner/operator to upgrade a GIV to a GIV-SP).

The Gulfstream GIV is a significantly improved- larger- longer-ranging and advanced development of the earlier GII and GIII. The most significant improvement with the GIV over the earlier Gulfstream models are the Rolls-Royce Tay turbofans- which bring significant fuel burn and noise emission improvements despite their higher thrust output than the GII and GIII's Speys. Indeed- the GIV continues a Gulfstream and Rolls-Royce association that dates back to the original Dart powered Gulfstream GI.

Other changes included a stretched fuselage- and aerodynamically and structurally improved wing with 30% fewer parts- greater fuel capacity and range- increased span tail and an advanced EFIS avionics suite with six color CRT displays. In 1990- Gulfstream’s then-CEO Allen E. Paulson and a Gulfstream flight crew set 35 international records for around-the-world flight in a Gulfstream GIV. Both the Gulfstream GIV and GIV-SP have since set a number more records.

Current History
As mentioned- the GIV was upgraded to the GIV-SP and was later redesignated the G400. A short-ranged variant was created based on the original GIV and designated the G300. With the introduction of the G500/G550 (an upgrade to the GV)- the GIV received an upgrade based on the newly created G550. This created the G450 and its short-ranged variant the G350 that are in-service today.

Chart A (left) shows the New and Pre-Owned delivery history of the GIV and GIV-SP aircraft. A total of 502 GIV and GIV-SP aircraft were delivered from 1985 to 2003. While both the New and Pre-Owned deliveries have shown different delivery cycles- the Pre-Owned results worldwide in 2007 were evenly split at 41 each at near record results of 82. Both Pre-Owned aircraft are currently in an upward trend that have exceeded the mark of 80 sold in one year for only the second time historically.

The data contained in Table B (left) is published in the B&CA- May 2008 issue- but is also sourced from Conklin & de Decker. As we mentioned in past articles- a potential operator should focus on payload capability. The GIV “Available payload with Maximum Fuel” in pounds at 1-220 pounds was below the CL604 and both of these aircraft were well below the Falcon 900 at 1-850 pounds. However- with the introduction of the GIV-SP- this payload number changed to 2-019 pounds- 65.5% greater than the GIV and a 9.1% increase over the Falcon 900 aircraft.

According to Conklin & de Decker- the cabin volume of the GIV-SP at 1-525 cubic feet is 20.6% greater than the Falcon 900 and 32.6% greater than the CL604 (see Chart B (left)).

Powerplant details
As mentioned previously- both the Gulfstream GIV and GIV-SP have two TAY 611-8 Rolls-Royce engines each offering 13-850 pounds of thrust. By comparison- the CL604 is powered by two General Electric engines - CF34-3B each offering substantially less thrust at 8-729 pounds. The Falcon 900 utilizes three Honeywell engines –the TFE 731-5AR-1C- with 4-500 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 Gulfstream GIV and GIV-SP to its competition factoring direct costs and with all aircraft flying a 1-000nm mission with 800 pounds (four passengers) payload. The Gulfstream GIV and GIV-SP long range cruise at an average 445 knots shows the cost per mile comparisons at $10.04 (GIV) and $9.98 (GIV-SP) per nautical mile- which is 32.5% more expensive to operate than a Challenger 604 at $7.85 per nm. The Dassault Falcon 900 has the lowest cost per mile at $7.49 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 Gulfstream GIV at $4-399 per hour is 32% more to operate than the Falcon 900 at $3-327 per hour. The Bombardier CL604 has the lowest variable cost at $3-195 per hour of the competitive aircraft listed.

Productivity Comparisons
The points in Chart E (right) center on the same group of aircraft. 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 GIV and GIV-SP business jets are extremely competitive against other equivalent-sized business jets and leads the index compared to the Falcon 900 and Challenger 604 due- largely- to all of the factors combined- i.e. greater range- faster speed and more cabin volume at a higher price.

In our next article- we will continue this index comparison plot to include these aircraft as we place the Falcon 900 series (the F900B- C- and EX aircraft) under the spotlight.

In Table C (below) are the relative retail prices from B&CA magazine 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. As shown in the table- the GIV has the greatest percentage of the existing fleet “For Sale” at 18.4% (buyer’s market) compared to the GIV-SP at 8.7% (seller’s market) and the CL604 at 6.1%. Over the 12 months the CL604 is showing the largest number of Full Sales Transactions at 86- or an average of seven per month compared to the combined total for the GIV and GIV-SP at 67 or an average of five to six per month.

Within the preceding paragraphs we have touched upon 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- too- however.

Using JETNET/AvData information- there are currently 64 (39 GIV and 25 GIV-SP) or 12.9% of the pre-owned GIV and GIV-SP models “For Sale”. The Gulfstream GIV and GIV-SP fares well alongside its competition- so those operators in the market should find the preceding comparison of value. Our expectations are that the Gulfstream GIV and GIV-SP- which started delivering in 1985- will continue to 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- TX 75077; Tel: 214-226-9882; Web: www.mdchase.aero

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