Mike Chase has thirty-five year's extensive global managerial experience in marketing,... Read More
How do Bombardier’s Global 7500 and the Gulfstream G650ER compare? What are the advantages that each model offers? Mike Chase analyses the performance of Business Aviation’s two big ultra-long-range contenders…
Over the following paragraphs we’ll consider key productivity parameters (including payload, range, speed and cabin size) and the current market for the Bombardier Global 7500 and Gulfstream G650ER. In a direct comparison of these Ultra-Long-Range business jet models, which has the greater range?
We’ll assess the pros and cons of each model…
Bombardier Global 7500
Announced in October 2010 as the Global 7000, the model was renamed the Global 7500 after its extended range capability was announced in 2018. The Global 7500 was type certified by Transport Canada (TC) and the US Federal Aviation Administration (FAA) towards the end of 2018 and entered service on December 20, 2018. EASA certification followed in February 2019.
The Global 7500 features an improved design over the Global 6000 aircraft with a new high-speed transonic wing, which significantly optimizes its aerodynamic efficiency. The aircraft is outfitted with a Global Vision flight deck and a Rockwell Collins avionics system. It also features an onboard maintenance system (OMS), datalink, high-speed SATCOM, next generation cabin management system (CMS) and controller pilot datalink communication (CPDLC).
As of August 2019, four Bombardier Global 7500s were in operation, according to JETNET, and at a recent investors conference, CEO Alain Bellemare said he expected Bombardier to achieve its 2019 delivery targets, including 15-20 Global 7500s.
The Global 7500 had 100 secured orders as it entered service on December 20, 2018, Vista Jet and NetJets having a combined 50 orders.
The Gulfstream G650 began production in 2011 and remains in production today. There are 239 Gulfstream G650 aircraft in operation worldwide with 237 wholly owned and two in shared ownership. To date, just two Gulfstream G650s have been retired.
When the Gulfstream G650 entered service in 2012 it was one of the fastest and longest-range business jets ever built.
In 2015 Gulfstream added the G650ER, extending the range and maximum gross weight and increasing the fuel capacity compared to the G650. Currently 134 Gulfstream G650ER aircraft are in operation worldwide.
Of the combined 373 G650 and G650ER jets in operation today, North America has the largest fleet percentage (50%), followed by Asia (31%) and Europe (14%), for a combined total of 95% of the world’s fleet. At the time of writing, 32% are in fleet ownership with the largest fleet operator – Jet Aviation Flight Services, Inc. (United States) – owning six.
A potential operator should focus on payload capability as a key factor when selecting the right aircraft for their need. Table A shows the Bombardier Global 7500’s ‘Available Payload with Maximum Fuel’ to be 1,890lbs., which is greater than the 1,300lbs. offered by the Gulfstream G650ER.
TABLE A: Bombardier Global 7500 vs Gulfstream G650ER Payload Comparison
Cabin Cross-Section Comparison
Chart A depicts the cabin cross-sections of the Bombardier Global 7500 and Gulfstream G650ER. As shown, the Bombardier Global 7500 has slightly less cabin height (6.17ft vs 6.25ft) and width (8.0ft vs 8.17ft) compared to the Gulfstream G650ER.
However, not depicted on the chart, the Global 7500 has greater cabin length (54.5ft) compared to the Gulfstream G650ER (46.8ft) providing more overall cabin volume (estimated between 2,400-2,650cu.ft) for the Global 7500 compared to the Gulfstream G650ER (2,138cu.ft). The Global 7500 and Gulfstream G650ER each provide a generous 195cu.ft internal baggage space.
CHART A: Bombardier Global 7500 vs Gulfstream G650ER Cabin Cross Section Comparison
As depicted in Chart B using Wichita, Kansas, as the origin point the Bombardier Global 7500 shows more range coverage (7,725nm) than the Gulfstream G650ER (7,437nm), each with eight passengers.
Note: For business jets, ‘Eight Pax Range’ represents the maximum IFR range of the aircraft at long range cruise. NBAA IFR fuel reserve calculation is for a 200nm alternate. This range does not include winds aloft or any other weather-related obstacles.
CHART B: Bombardier Global 7500 vs Gulfstream G650ER Range Comparison
Two GE Passport 20-19BB1A engines power the Global 7500 each offering 18,920lbst and using 435 gallons per hour (GPH). The Gulfstream G650ER, meanwhile, is powered by two Rolls-Royce BR700-725A1-12 engines, each offering 16,900lbst and burning 415 gallons per hour (GPH).
Total Variable Cost Comparison
The ‘Total Variable Cost’, sourced from JETNET and illustrated in Chart C, is defined as the cost of fuel expense, maintenance labor expense, scheduled parts expense, and miscellaneous trip expense (hangar, crew and catering).
There is an estimated 1% difference with the G650ER showing a slightly lower cost per hour ($4,545 vs $4,596). However, more cost data is needed as more Global 7500s become operational.
CHART C: Bombardier Global 7500 vs Gulfstream G650ER Variable Cost Comparison
Aircraft Comparison Table
Table B contains new prices (per Vref) for a 2019 model Bombardier Global 7500 and Gulfstream G650ER. The long-range cruise speed and range numbers are from B&CA, the cabin volumes are from each OEM, and the number of aircraft in-operation, percentage for sale, and average numbers sold are from JETNET.
Being so new to market, the Bombardier Global 7500 fleet had no pre-owned aircraft for sale as of the end of August 2019, while the Gulfstream G650ER had just 6% of its fleet for sale. The average number of new and used transactions (units sold) per month over the previous 12 months for the Gulfstream G650ER was three.
TABLE B: Bombardier Global 7500 vs Gulfstream G650ER Aircraft Comparison Table
Maximum Scheduled Maintenance Equity
Charts D and E display the Bombardier Global 7500 and Gulfstream G650ER respectively, depicting (and projecting) the Maximum Maintenance Equity each jet has available, based on its age.
The Maximum Maintenance Equity figure was achieved the day an aircraft came off the production line (since it had not accumulated any utilization toward any maintenance events).
The percent of the Maximum Maintenance Equity that an average aircraft will have available, based on its age, assumes:
- Average annual utilization of 470 flight hours (in the case of the Global 7500) and 424 flight hours (in the case of the G650ER); and
- All maintenance is completed when due.
CHART D– Bombardier Global 7500 Maximum Scheduled Maintenance Equity
CHART E – Gulfstream G650ER Maximum Scheduled Maintenance Equity
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 can use accelerated depreciation of assets by taking a greater percentage of the deductions during the first few years of the applicable recovery period.
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 any given year.
The US enacted the 2017 Tax Cuts & Jobs Act into law on December 22, 2017. Under the new Act, taxpayers may be able to deduct up to 100% of the cost of a new or pre-owned aircraft purchased after September 27, 2017 and placed in service before January 1, 2023.
This 100% expensing provision is a huge bonus for aircraft owners and operators. After December 31, 2022 the Act decreases the percentage available each year by 20% to depreciate qualified business jets until December 31, 2026.
Table C depicts an example of using the MACRS schedule for a 2019-model Bombardier Global 7500 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods.
TABLE C: Bombardier Global 7500 MACRS Depreciation Schedule
Table D depicts an example of using the MACRS schedule for a 2019-model Gulfstream G650ER in private (Part 91) and charter (Part 135) operations over five- and seven-year periods.
As of August 2019, no Bombardier Global 7500 jets were available on the used aircraft market. By comparison, eight Gulfstream G650ER business jets were listed for sale, and two were displaying asking prices of $42.95m and $47.5m.
While each serial number is unique, the Airframe Total Time (AFTT) and age/condition of an aircraft will cause great variation in the price of a specific aircraft – even between two aircraft from the same year of manufacture. 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 F are centered on the Bombardier Global 7500 and Gulfstream G650ER. For added measure, we include the original Gulfstream G650, too. 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:
Eight Passenger Range (nm) with available fuel;
The long-range cruise speed flown to achieve that range;
The net cabin volume available for passengers and amenities.
Others may choose different parameters, but serious business aircraft buyers are usually impressed with price, range, speed and cabin size.
The new 2019-model Bombardier Global 7500 is purchased at a higher price than a new 2019-model Gulfstream G650ER, and the G650ER exhibits a slightly lower hourly variable operating cost.
In terms of productivity, however, the Bombardier Global 7500 edged out the Gulfstream G650ER with a greater cabin volume (additional cabin length), greater range, and extra ‘Available Payload with Maximum Fuel’ capacity.
CHART F: Bombardier Global 7500 vs Gulfstream G650ER Productivity Comparison
Within the preceding paragraphs we have touched upon several of the attributes that business jet 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.
Operators should weigh up their mission requirements precisely when picking which option is the best for them.
For many years Gulfstream’s G650ER dominated the top end of the purpose-built business jet market. Our comparison illustrates that entry into the market of the Bombardier Global 7500 introduces some healthy competition, and perhaps some incentive for our two ultra-long-range business jet OEMs to raise the bar even further with future business jet announcements… This is a market segment well worth watching!