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Hawker Beechcraft 125-700

In this month’s Aircraft Comparative Analysis- we provide information on a selection of 1980s mid-sized pre-owned Business Jets in the $1.5 million (or less) price range for the purpose of valuing the pre-owned Hawker Beechcraft 125-700 aircraft.

Can a Hawker 700 successfully compete against aircraft when the same engine thrust ratings are offered? We’ll consider the usual productivity parameters - payload/range- speed and cabin size- and cover current market values in our analysis. The field in this study includes Bombardier’s Learjet 55 and the IAI Westwind 2.

BRIEF HISTORY
The Hawker 125-700 first flew on June 19- 1976- and the model remained in production until it was replaced by the Hawker 125-800 in 1984. With the exception of some minor internal changes the Hawker 700 series was nearly identical to the Hawker 600 model except that it adapted the Garrett (Honeywell) TFE-731 as the standard engine- which brought with it significant performance and fuel economy benefits- and replacing the Rolls-Royce Viper engines.

There were a total of 215 Hawker 700s built – 180 Hawker 700A and 35 700B. The Hawker 700 can be RVSM certified when a service bulletin or supplemental type certificate (STC) is complied with.

MARKET SHARE
Chart A represents the in-operation aircraft Market Share as of March 2011 with the Hawker 700 at 50% followed by the Learjet 55 and Westwind 2 at 30% and 20%- respectively. There are currently 409 total aircraft in operation for these three models today.

PAYLOAD AND RANGE
The data contained in Table A is published in the Business & Commercial Aviation (B&CA)- May 2010 issue- but 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 Hawker 700’s ‘Available payload with Maximum Fuel’ at 1-350 pounds is higher than the Westwind 2 (920 lbs)- but significantly less than the Learjet 55 (2-495 lbs).

CABIN VOLUME
According to Conklin & de Decker- the cabin volume of the Hawker 700 (604 cubic feet) is 48 percent larger than the Learjet 55 aircraft (407 cubic feet)- as shown in Chart B. The Westwind 2 (323 cubic feet) has the smallest cabin volume in the field of comparison.

POWERPLANT DETAILS
As mentioned previously- the Hawker 700 is powered by two Honeywell TFE 731-3R engines each offering a thrust rating of 3-700 pounds. The Learjet 55 and the Westwind 2 are powered by two Honeywell TFE 731-3AR and TFE 731-3 engines respectively. All three aircraft have the same thrust rating at 3-700 pounds.

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 these aircraft. The nationwide average Jet-A fuel cost used from the August 2010 edition was $4.90 per gallonat 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 Hawker 700 to the Learjet 55 and Westwind 2 factoring direct costs with each aircraft flying a 1-000nm mission with 800 pounds (four passengers) payload. The Hawker 700 at $5.94 cost per nautical mile is significantly greater by $1.29 per mile than the Westwind 2 at $4.65 and the Learjet 55 at $4.15 cost per mile by $1.79 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 Hawker 700 at $2-175 has an 18% to 27% higher variable cost per hour compared to the Westwind 2 at $1-847 and the Learjet 55 at $1-717.

PRODUCTIVITY COMPARISONS
The points in Chart E center on the same group of business jets. Pricing used in the vertical axis is as published in the B&CA 2010 Purchase Planning Handbook. 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 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 Hawker 700 aircraft- as shown in the productivity index Chart E- is highly productive compared to the other business jets in this comparison.

The average speed- cabin volume- and maximum payload values from Conklin and De Decker and B&CA Magazine are shown in Table B for all the business jets in this field of comparison. Also in Table B is the average pre-owned retail price from Vref for each aircraft with the latest model produced. The last two columns of information show the number of aircraft in-operation and percentage ‘For Sale’ from JETNET.

As shown- the Hawker 700 leads the field in cabin size. Nevertheless- as at the end of February 2011- there were 56 or 27.3% of the fleet for sale - the highest percentage of the comparative field.

FULL-SALE TRANSACTION CYCLES
Chart F shows the ‘Full-Sale Transactions Cycles’ for the Hawker 700 aircraft from 1990 to 2010. The number of pre-owned full-sale transactions recorded in 2010 was 32- or almost three per month as a result of weaker average asking prices of $1.1 million. However- this jump in transactions reversed a two year downward trend in 2008 (25) and 2009 (18) from the previous peak in 2007 (43). 2010 was near the 21 yearly average of 33 full-sale transactions.

AIRPORT PERFORMANCE
The airport performance illustrated in Table C includes airport landing and balanced field length distances. The Hawker 700 has the shortest landing distance at 3-667 feet compared to the other aircraft. Take-Off Field Length (TOFL) distances data is not readily available.

LOCATION BY CONTINENT
Table D shows the location by continent for the Wholly-Owned Hawker 700 business jet. North America has the majority with 72% of the Hawker 700 fleet followed by Europe at 14%. (Not displayed on the table- currently- five Hawker 700 aircraft are in shared and three are in fractional ownership arrangements).

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

The Hawker 700 fares well against its competition - so those operators in the market should find the preceding comparison of value.

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.com

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