In this month’s Aircraft Comparative Analysis, Mike Chase provides information on two popular Ultra-Long-Range and Large Cabin business jets for the purpose of valuing the Bombardier Global 6000.
Over the following paragraphs, we’ll consider productivity parameters (payload/range, speed and cabin size) and cover current market values for the Bombardier Global 6000. The field in this comparative study includes the Gulfstream G550.
The Ultra-Long-Range business jet market began in 1995 with the Gulfstream GV followed two years later by the Bombardier Global Express. This jet market is defined as business jets that can fly 5,000nm or more. Today the Ultra-Long-Range & Large Cabin jet market has 2,002 aircraft in operation.
The Global 6000 traces its roots to the Global Express XRS, which was the third Ultra-Long-Range & Large Cabin business jet produced by Bombardier. The Global 6000 started delivering to customers in 2012.
One of the biggest differences between the Global Express XRS and the Global 6000 is the Rockwell Collins Pro Line Fusion avionics suite, which helps pilots manage, monitor and master flight automation. The Global 6000 offers a large, spacious cabin in excess of 2,000 cubic feet and can travel non-stop over 6,100 nm.
Currently there are 227 Global 6000 aircraft in operation worldwide, of which 207 are wholly-owned. Two are in shared ownership and 18 are in fractional ownership programs. Europe has the largest fleet percentage (40%), followed by North America (35%) and Asia (18%), accounting for a combined 93% of the fleet. Almost 10% of the in-operation fleet (8.4%) are leased, according to JETNET.
Payload & Range
The data contained in Table A are published by Conklin & de Decker and also in the B&CA, May 2017 issue. As we have mentioned in past articles, a potential operator should focus on payload capability as a key factor. The Global 6000 ‘Available Payload with Maximum Fuel’ at 2,804 lbs is greater than the Gulfstream G550 at 2,500 pounds of payload capability.
In addition, Table A shows the fuel usage by each aircraft in this field of study. The Global 6000 burns more fuel per hour at 512 gallons per hour (GPH) compared to 447 GPH of the Gulfstream G550.
According to Conklin & de Decker, the Global 6000 cabin volume is 2,002 cubic feet and its cabin length is 48.35ft. The Gulfstream G550 has the less cabin volume (1,812 cu. ft.) but offers more length at 50.1ft. The Global 6000 offers a significantly wider cabin, and marginally more height. Chart A (courtesy of UPCAST JETBOOK) shows the cross-section comparisons.
As depicted by Chart B and using New York JFK Airport as the origin point, the Gulfstream G550 shows more range coverage than the Global 6000, per Aircraft Cost Calculator (ACC).
Note: For jets and turboprops, ‘Seats-Full Range’ represents the maximum IFR range of the aircraft at Long-Range Cruise with all passenger seats occupied. ACC assumes NBAA IFR fuel reserve calculation for a 200nm alternate. The lines depicted do not include winds aloft or any other weather-related obstacles.
The Global 6000 is powered by two Rolls-Royce BR 710-A2-20 engines with a thrust rating of 14,750 lbs. The Gulfstream G550 business jet, meanwhile, is powered by two Rolls-Royce BR 710-C4-11 engines each offering less thrust with a rating of 15,385 lbs.
Cost Per Mile
Using data published in the May 2017 B&CA Planning and Purchasing Handbook and the August 2016 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet-A fuel cost used from the August 2016 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 Global 6000 to its competition, factoring direct costs and with each aircraft flying a 1,000nm mission with a 1,600 lbs (eight passengers) payload. The Global 6000 shows the highest cost per nautical mile at $6.45 compared to $5.88 for the Gulfstream G550. This is a difference of 8.8% cost per nautical mile in favor of the Gulfstream G550.
Total Variable Cost
The ‘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 Global 6000 computes at $2,945 per hour, 12.6% more than the Gulfstream G550’s $2,616 per hour.
Aircraft Comparison Table
Table B contains the New prices from Vref Pricing Guide for a 2017 model for each aircraft. The average speed, cabin volume and maximum payload values are from Conklin & de Decker, while the number of aircraft in-operation and percentage ‘For Sale’ are as reported by JETNET.
As depicted, the Global 6000 has 4.8% of its fleet currently ‘For Sale’ and the Gulfstream G550 has 5.8% ‘For Sale’. Meanwhile, the average number of new deliveries and used transactions (sold) per month for the Global 6000 is four units, on average, and the Gulfstream G550 is five units.
Aircraft that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, taxpayers are allowed to accelerate the depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period (see Table C).
In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favorable Alternative Depreciation System (ADS) where depreciation is based on a straight-line method, meaning that equal deductions are taken during each year of the applicable recovery period. In most cases, recovery periods under ADS are longer than recovery periods available under MACRS.
There are a variety of factors that taxpayers must consider in determining if an aircraft may be depreciated, and if so, the correct depreciation method and recovery period that should be utilized. For example, aircraft used in charter service (i.e. Part 135) are normally depreciated under MACRS over a seven-year recovery period or under ADS using a twelve-year recovery period.
Aircraft used for qualified business purposes, such as Part 91 business use flights, are generally depreciated under MACRS over a period of five years or by using ADS with a six-year recovery period. There are certain uses of the aircraft, such as non-business flights, that may have an impact on the allowable depreciation deduction available in a given year.
Table D depicts an example of using the MACRS schedule for a 2017 model Global 6000 aircraft in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a new price of $62.31m, per Vref Pricing guide.
Asking Prices & Quantity
The current used jet market for the Global 6000 shows a total of 12 aircraft are currently ‘For Sale’ with one 2012 model displaying an asking price of $28.5m. The remaining 11 Global 6000 aircraft on the market invite buyers to a make an offer.
While each serial number is unique, the Airframe (AFTT) hours and age/condition will cause great variations in price, essentially the final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.
The points in Chart E are centered on the same aircraft. Pricing used in the vertical axis is as published in the Vref Pricing Guide. 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:
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 Global 6000 displays a high level of productivity.
Popular attributes of the Bombardier Global 6000 are its larger cabin volume, higher long-range cruise speed and greater available payload with maximum fuel when compared to the Gulfstream G550. The Gulfstream G550, meanwhile, offers a lower costs per mile, lower variable costs, has a lower fuel burn and more range, plus a lower acquisition price (new).
Operators in the market for a new Ultra-Long-Range & Large Cabin jet should weigh their mission requirements precisely when picking the option that is the best for them.
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 that might factor in a buying decision, however.
The Bombardier Global 6000 continues to be very popular today. Those operators in the market should find the preceding comparison useful. Our expectations are that the Bombardier Global 6000 will continue to do well in the used aircraft sales market for the foreseeable future.