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Aircraft Comparative Analysis - Gulfstream G550

n this month’s Aircraft Comparative Analysis- we will provide information on the pre-owned large cabin business jets in the $50m-plus price range for the purposes of valuing the Gulfstream G550 aircraft. The G550 has recently relinquished its title as the top-end of Gulfstream’s in-service product line as the G650 has entered service. As of this writing there are nine G650s that have entered service. One of the key questions regularly asked is- “Will the G650 consume demand from the G

Mike Chase   |   1st April 2013
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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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In this month’s Aircraft Comparative Analysis- we will provide information on the pre-owned large cabin business jets in the $50m-plus price range for the purposes of valuing the Gulfstream G550 aircraft. The G550 has recently relinquished its title as the top-end of Gulfstream’s in-service product line as the G650 has entered service.

As of this writing there are nine G650s that have entered service. One of the key questions regularly asked is- “Will the G650 consume demand from the G550?” This will be one question that we will seek to address. The current New/Used percentage split for the Gulfstream G550 aircraft is 56% ‘New’ and 44% ‘Used’- according to JETNET records. There are 384 G550 aircraft in operation around the world. The majority- 363 units- are wholly-owned- 15 are fractionally owned and six are in shared-ownership.

Over the following paragraphs we’ll consider some of the usual productivity parameters - payload/range- speed- and cabin size – and cover current and future market values. The field of study also includes Bombardier’s Global 6000.

BRIEF HISTORY
The Gulfstream G550 traces its roots to the Gulfstream GV which was the first ultralong- range large cabin business jet produced. The GV started delivering to customers in 1995.

Most notable about the GV is its 6-500nm range- made possible (in part) by the BR710A1-10 engines powering it. The GV’s range makes it capable of non-stop flight from New York to Tokyo.

Features on the GV include enhanced weather radar- autopilot and head-up display for the pilot. Safety features include the First Enhanced Vision Systems (EVS) that allows increased visibility in adverse environments. Two new aircraft followed the GV - the Gulfstream G550 in 2003 and the G500 in 2004.

As of this writing there are nine G650s that have entered service. One of the key questions regularly asked is- “Will the G650 consume demand from the G550?” This will be one question that we will seek to address. The current New/Used percentage split for the Gulfstream G550 aircraft is 56% ‘New’ and 44% ‘Used’- according to JETNET records. There are 384 G550 aircraft in operation around the world. The majority- 363 units- are wholly-owned- 15 are fractionally owned and six are in shared-ownership.

Over the following paragraphs we’ll consider some of the usual productivity parameters - payload/range- speed- and cabin size – and cover current and future market values. The field of study also includes Bombardier’s Global 6000.

BRIEF HISTORY
The Gulfstream G550 traces its roots to the Gulfstream GV which was the first ultralong- range large cabin business jet produced. The GV started delivering to customers in 1995.

Most notable about the GV is its 6-500nm range- made possible (in part) by the BR710A1-10 engines powering it. The GV’s range makes it capable of non-stop flight from New York to Tokyo.

Features on the GV include enhanced weather radar- autopilot and head-up display for the pilot. Safety features include the First Enhanced Vision Systems (EVS) that allows increased visibility in adverse environments. Two new aircraft followed the GV - the Gulfstream G550 in 2003 and the G500 in 2004.

PAYLOAD AND RANGE
The data contained in Table A is published in the B&CA May 2012 issue- but is also sourced from Conklin & de Decker. As we regularly state- a potential operator should focus on payload capability as a key factor. The Gulfstream G550 ‘Available payload with Maximum Fuel’ at 2-500 pounds offers less by way of payload capability than the Global 6000 (2-804 lbs).

Aircraft Comparative Analysis - Gulfstream G550 - Table A April 13

 

According to Conklin & de Decker- the cabin volume of the G550 at 1-669 cubic feet is also less than the Global 6000 (2-140 cubic feet) as represented in Chart A.

Aircraft Comparative Analysis - Gulfstream G550 - Chart A April 13

 

POWERPLANT DETAILS
The G550 is powered by two Rolls-Royce BR710-C4-11 engines- each offering 15-385 pounds of thrust. The Global 6000 is also powered by a pair of Rolls-Royce engines- offering 14-750 pounds of thrust each.

COST PER MILE COMPARISONS
Using data published in the May 2012 B&CA Planning and Purchasing Handbook and the August 2012 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet-A fuel cost in the August 2012 edition was $6.30 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 B details ‘Cost per Mile’ and compares the G550 to the Global 6000 factoring direct costs- and with each aircraft flying a 6-000nm mission with 1-600 pounds (eight passengers) payload. The G550- at $6.59 cost per mile- is lower by 18.4% compared to the Global 6000 ($8.08 cost per mile).

Aircraft Comparative Analysis - Gulfstream G550 - Chart B April 13

 

TOTAL VARIABLE COST COMPARISONS
The ‘Total Variable Cost’ as shown in Chart C is defined as the cost of Fuel Expense- Maintenance Labor Expense- Scheduled Parts Expense and Miscellaneous Trip Expense. The total variable cost for the G550 at $2-984 is lower by 22.9% compared to the Global 6000.

Aircraft Comparative Analysis - Gulfstream G550 - Chart C April 13

 

PRODUCTIVITY COMPARISONS
The points in Chart D center on the Gulfstream G550 aircraft. Pricing used in the vertical axis is as published in 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;

Aircraft Comparative Analysis - Gulfstream G550 - Chart D April 13

 

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 jets are considered the “r” squared factor would equal a number above 0.9.

Others may choose different parameters- but serious business jet 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 G550- as shown in our productivity index- is competitive with the Global 6000 largely thanks to its longer mission reach and lower operating costs. In various other aspects shown above- the Global 6000 edges its comparison.

Table B contains the average equipped price from Vref for each aircraft. The average speed- cabin volume and maximum payload values are from Conklin & de Decker. The number of aircraft in-operation and percentage ‘For Sale’ are as reported by JETNET.

Aircraft Comparative Analysis - Gulfstream G550 - Table B April 2013

 

SUMMARY
Within the preceding paragraphs we have touched upon several of the key attributes that business jet operators value. However- there are often other qualities such as service and support that factor in a buying decision- but which are beyond the scope of this article.

And so we are left with the question of the effect the G650 will have on the G550. Gulfstream told World Aircraft Sales Magazine that it intends to keep selling the G550. The next available position on the G650 is way out into 2017. This is a long wait for owners and operators with more immediate need for an ultra-long-range- large cabin jet- and there exists a significant price and performance difference between the two models. For example- according to B&CA Equipped Prices for May 2012- the G550 is priced at $56.250 million compared to the G650 at $64.5 million- a difference of $8.250 million or 14.7% more in current-year dollars.

We’ll keep watch on what happens with the G550 line- but the jet has its clear advantages and is very popular among private individuals- companies- and charter operators and aircraft management companies alike. Our expectations are that the Gulfstream G550 will continue to do well in the new and pre-owned markets as further deliveries of the G650 aircraft are made.

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;
Email: Mike@avbuyer.com-
Web: www.mdchase.com


Read more about: Gulfstream G550 | Bombardier Global 6000 | Gulfstream | Bombardier | Bombardier Global | Jets for Sale | New Jets for Sale | Used Jets for Sale | Jet Comparison | Operating Costs | Mike Chase | Gulfstream Jets

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