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Gulfstream GV

In this month’s Aircraft Comparative Analysis- we’ll provide information on a pair of pre-owned ultra-long-range/large cabin business jets in the $20m-$32m range for the purpose of valuing the Gulfstream GV aircraft- produced between 1995 and 2002. How important is having the longest range aircraft in the ultra long-range market? This is one question that this article will help answer.

The current New/Used percentage split for the Gulfstream GV aircraft is 100% pre-owned according to JETNET records- and there are 191 GV aircraft in operation today - seven in fractional ownership- one in shared ownership and 183 wholly owned.

Within the scope of this article- we will consider the usual productivity parameters - payload/range- speed and cabin size - and cover current and future market values. In the following analysis- we will compare the GV with Bombardier’s Global Express produced from 1999 to 2005.

BRIEF HISTORY
The Gulfstream GV was the first ultra-long-range/large cabin business jet produced and delivered 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. The aircraft can be RVSM certified when Aircraft Service Change ASC13 is complied with.

Production of the GV marked the first time that Gulfstream decided to build more than one aircraft at the same time as another model. Historically- Gulfstream ended production of one model (GI to GIV) before starting production of another new aircraft.

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 allow increased visibility in adverse environments. The aircraft is also equipped with commercial and military communications equipment to provide secure voice and data capability. Also- the GV is the only ultra-long-range aircraft that provides as an option either a forward (standard in other ‘like’ aircraft) or an aft galley.

Two new aircraft followed the GV- the Gulfstream G550 in 2003 with greater range and the G500 in 2004. Both aircraft are still in production today.

MARKET SHARE
The GV entered the market three years earlier than the Global Express and met its ultra-long-range target and was an important development in creating a new market (Ultra-Long-range) that never existed before. As Chart A represents- the Aircraft Delivery market-share percentage has the GV at 191 units - or 56% - versus the Global Express at 149- or 44%. There are currently 340 total aircraft in operation for these two models.

PAYLOAD AND RANGE
The data contained in Table A 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 GV ‘Available payload with Maximum Fuel’ at 1-500 lbs is less than that of the Global Express at 1-792 lbs.

CABIN VOLUME
According to Conklin & de Decker- the cabin volume of the GV at 1-669 cubic feet is also less than the Global Express at 2-140 cubic feet- as shown in Chart B.

POWERPLANT DETAILS
As mentioned- the GV is powered by two Rolls-Royce BR710-A1-10 engines- each offering 14-750 pounds of thrust. The Global Express is also powered by Rolls-Royce- this time a pair of BR710-A1-20 powerplants- each offering 14-750 pounds of thrust.

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 details ‘Cost per Mile’- and compares the GV to the Global Express factoring direct costs- and with each aircraft flying a 3-000nm mission with a 1-600 pound (eight passengers) payload. The GV at $8.54 cost per mile is higher than the Global Express at $7.81 cost per mile.

TOTAL VARIABLE COST COMPARISONS
The ‘Total Variable Cost’- illustrated in Chart D- is defined as the cost of Fuel Expense- Maintenance Labor Expense- Scheduled Parts Expense- and Miscellaneous Trip Expense. The total variable cost for the GV at $3-825 is more than the Global Express at $3-701.

PRODUCTIVITY COMPARISONS
The points in Chart E- center on the same aircraft. Pricing used in the vertical axis is as published in the B&CA August 2010 Operations Planning Guide. The productivity index requires further discussion in that the factors used can be somewhat arbitrary.

Productivity can be (and it is here) defined 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 GV- as shown in productivity index Chart E- is competitive with the Global Express - largely thanks to its longer mission reach (as much as 5% longer than the Global Express). In various other aspects shown- the Global Express edges the comparison.

The pre-owned market price of the GV (2002) is the same price as the Global Express (2002). The GV offers less cabin volume and is more expensive to operate on a cost per mile basis- and on a variable cost basis than the Global Express. However- in the category of the ultra-long-range and large cabin- the GV at 6-250nm range with seats full (as reported by Conklin and de Decker) is greater than the 5-940nm range of the Global Express. Furthermore- the GV entered the market several years sooner than its competitor.

Table C contains the average equipped prices from B&CA magazine 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. It’s interesting to note that the 5.2% of GV fleet for sale should traditionally represent a sellers’ market while the 14% Global Express market represents a buyers’ market.

AIRPORT PERFORMANCE
The airport performance illustrated in Table D includes airport Take-Off Field Length (TOFL)- Landing- and Balanced Field Length. The GV has the greater numbers in each of these airport performance criteria compared to the Global Express.

AVERAGE LENGTH OF AIRCRAFT OWNERSHIP
The “Average Length of Ownership” for the GV “original” owners is 3.8 years and “pre-owned” owners is 2.9 years. This information is compiled from JETNET Evolution and STAR reporting systems- and can be valuable information for dealer/broker repeat business to anticipate frequency of aircraft ownership changes.

LOCATION BY CONTINENT
The major based-at locations for the GV (wholly-owned) are in Europe and North America where a combined total of 86% of the fleet resides (see Table E).

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

Essentially- the Gulfstream GV fares well against its competition depending on what aspects of its performance are important to your mission requirements- so those operators in the market should find the preceding comparison of value. Our expectations are that the Gulfstream GV aircraft will continue to do well in the pre-owned market - especially if the fleet percentage available for sale remains low.

For more information: Michael Chase is president of Chase & Associates- and can be contacted at1628 Snowmass Place- Lewisville- TX 75077; Tel: 214-226-9882; Web: www.mdchase.com

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