In this month’s Aircraft Comparative Analysis, Mike Chase provides information on a selection of used jets in the $1.1-4.8m price range for the purpose of valuing the used Bombardier Learjet 60 and Bombardier Learjet 60XR series.
Following, we’ll consider the productivity parameters (payload/range, speed and cabin size) and cover current market values. The field in this study includes the Gulfstream G100
. Are price, range and speed always preferable over cabin volume? We will seek answers to this and other questions.
The original Bombardier Learjet 60
, a medium cabin, medium range business jet, was announced in October 1990 as the replacement for the Learjet 55C, from which it is derived. A proof of concept airframe flew for the first time on October 1990, while the first Learjet 60 made its maiden flight in June 1991. Certification and early deliveries followed at the end of 1992.
The Learjet 60 is the largest of the certified Learjet family and incorporates fuel-efficient engines, a wider, stretched fuselage than the Learjet 55C, a glass cockpit and steer-by-wire nose wheel.
Thrust reversers and single-point refueling were also standard equipment, and the aircraft features a full galley together with an aft toilet. Production of the Learjet 60 ended in 2007 after 316 aircraft had been built (including the Learjet 60SE produced from 2004).
The Bombardier Learjet 60XR
, meanwhile began delivering in 2007, and offered Learjet 60 operators an upgraded cabin, Rockwell Collins ProLine 21 advanced avionics suite and three disc steel wheel brakes. Production of the Learjet 60XR ended in 2013.
The total number of manufactured Learjet 60 aircraft is 316, with 302 still in operation globally, of which 298 are wholly-owned. None are in shared ownership but four are in fractional ownership. Fourteen have been retired. Meanwhile, 114 Learjet 60XRs were produced, with 112 still in operation globally. All 112 are wholly-owned. Two have been retired.
Of the Learjet 60 aircraft in operation by continent, North America has the largest percentage at 80%, followed by South America (9%) and Europe (7%), accounting for a combined 96% of the world’s fleet. 12% of the Learjet 60s in operation today are in fleet ownership, and 6.3% of the world’s Learjet 60s are leased.
Meanwhile, of the Learjet 60XRs in operation, North America has the largest percentage (68%), followed by Asia (12%) and Europe (10%) for a combined total of 90% of the world’s fleet. Almost a quarter (24%) of the Learjet 60XRs in operation today are in fleet ownership, and 6.2% of the world’s Learjet 60XR fleet is leased.
As of May 2018, the Learjet 60 market comprised of 10% owned since new versus 90% used, while the Learjet 60XR market comprised of 25% new versus 75% used.
How will the Gulfstream G100 (pictured) compare against the Learjet 60/60XR?
ADS-B Out Status
Of the 302 Learjet 60s in operation worldwide, 143 (47%) have ADS-B Out installed, leaving 53% of the fleet yet to comply. Just over half (55%) of the 112 Learjet 60XRs in operation worldwide are equipped, leaving 45% of the fleet yet to comply.
Payload & Range Comparisons
As we have mentioned in past articles, a potential operator should focus on payload capability as a key factor. Depicted in Table A, the Learjet 60’s and Learjet 60XR’s ‘Available Payload with Maximum Fuel’ (1,068lbs and 944lbs, respectively) is greater than that offered by the Gulfstream G100 (920lbs).
TABLE A - Bombardier Learjet 60/60XR vs Gulfstream G100 Payload Comparison
Cabin Cross-Section Views
Chart A shows a cabin cross-section comparison with the Learjet 60/60XR offering more width (5.92ft) than the Gulfstream G100 (4.75ft). The height of the Learjet 60/60XR (5.71ft) is also slightly more than the Gulfstream G100 (5.6ft).
CHART A: Bombardier Learjet 60/60XR vs Gulfstream G100 Cabin Comparison
Not depicted, the Learjet 60/60XR cabin length is slightly longer at 17.67ft compared to the Gulfstream G100 at 17.1ft. Overall, the Learjet 60/60XR offers a 47% larger cabin volume than the Gulfstream G100 (447cu.ft versus 304cu.ft).
In terms of provision for baggage, the Learjet 60/60XR has 24cu.ft of internal and 24cu.ft of external baggage space, while the Gulfstream G100 has 9cu.ft of internal baggage space and 55cu.ft of external baggage space.
As depicted by Chart B using Wichita, Kansas as the origin point, the Gulfstream G100 (2,910nm) shows more range coverage than the Learjet 60 (2,418nm) and the Learjet 60XR (2,398nm). Each business jet in the field, however, offers adequate range to cover the US, Canada, Mexico and Central America.
CHART B: Bombardier Learjet 60/60XR vs Gulfstream G100 Range Comparison
Note: For business jets, ‘four passengers with available fuel’ represents the maximum IFR range of the aircraft at Long-Range Cruise with four passenger seats occupied. NBAA IFR fuel reserve calculation for a 200nm alternate is assumed. The lines depicted do not include winds aloft or any other weather-related obstacles.
The Learjet 60/60XR is powered by two PW305A engines, each offering 4,679lbst. The Gulfstream G100, meanwhile, offers a pair of Honeywell TFE 731-40R engines, each with 4,250lbst.
Total Variable Cost
The ‘Total Variable Cost’ illustrated in Chart C, sourced from Conklin & de Decker, is defined as the Cost of Fuel Expense, Maintenance Labor Expense, Scheduled Parts Expense and Miscellaneous Trip Expense. The Total Variable Cost for the Learjet 60 computes at $2,347 per hour, which is more expensive than the Gulfstream G100 at $2,222 per hour.
However, the Learjet 60XR ($2,168) shows the lowest variable cost in this field of study.
CHART C: Bombardier Learjet 60/60XR vs Gulfstream G100 Variable Costs
Aircraft Comparison Table
Table B contains the range of used prices (per Vref) for each aircraft. The average speeds and ranges are from Conklin & de Decker, while the number of aircraft in-operation and percentage ‘For Sale’ and average sold are as reported by JETNET.
TABLE B: Bombardier Learjet 60/60XR vs Gulfstream G100 Comparison
The Learjet 60 has 12.3% of its fleet ‘For Sale’ as of the end of April 2018, and the Learjet 60XR 11.6%. The average number of used transactions per month, meanwhile, shows the Learjet 60 has an average of five and the Learjet 60XR two per month, compared to the Gulfstream G100 which averages less than one sale per month over the past 12 months.
Maximum Scheduled Maintenance Equity
Chart D and E display the Learjet 60 and Learjet 60XR, respectively, depicting and projecting the Maximum Maintenance Equity each has available, based on age.
- The Maximum Maintenance Equity figure was achieved the day the 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: 400 Flight Hours
- All maintenance is completed when due
CHART D: Maximum Scheduled Maintenance Equity - Learjet 60
CHART E: Maximum Scheduled Maintenance Equity - Learjet 60XR
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.
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.
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 used 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 2003 Learjet 60 business jet aircraft in private (Part 91) and charter (Part 135) operations over five and seven-year periods, assuming a 2003 list price for a 2003 model Learjet 60 at $2.15m (per Vref Pricing Guide).
TABLE C: Bombardier Learjet 60 MACRS Depreciation Schedule
Table D depicts an example of using the MACRS schedule for a 2013 Learjet 60XR, assuming a 2013 list price of $4.8m.
TABLE D: Bombardier Learjet 60XR MACRS Depreciation Schedule
Asking Prices & Quantity
The current used market for the Learjet 60 shows a total of 38 aircraft ‘For Sale’ with 15 displaying asking prices that range from $1.395m to $2.95m. There are a total 13 Learjet 60XRs ‘For Sale’, displaying asking prices ranging between $3.25m and $4.55m. Two Gulfstream G100s currently are showing ‘For Sale’ with one displaying an ask price of $2m.
While each serial number is unique, the Airframe (AFTT) hours and age/condition will cause great variations in price. Of course, 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 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:
- Four/Eight Passenger Range (nm) with available fuel;
- The long-range cruise speed flown to achieve that range;
- The gross 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.
CHART F: Bombardier Learjet 60/60XR vs Gulfstream G100
After consideration of the Price, Range, Speed and Cabin Size, we can conclude that the Learjet 60 and Learjet 60XR display a high level of productivity. The Learjet models offers a much larger cabin volume, but less range and speed compared to the Gulfstream G100. (The production run of the Gulfstream G100 was limited before Gulfstream presented the G150 model with a larger cabin volume.)
Also, the Learjet 60 and Learjet 60XR have a higher ‘Available Payload with Maximum Fuel’ offering, while the Learjet 60XR has considerably lower variable cost per hour, but higher purchase price. Each aircraft has its pros and cons, and operators should weigh up their mission requirements precisely when picking which option 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.
The Learjet 60 and Learjet 60XR continue to be popular today. Those operators in the market should find the preceding comparison useful. We expect both models to continue to do well in the used markets for the foreseeable future.
Of course, if your aircraft is not outfitted with ADS-B Out, it cannot be placed in useful operation after December 31, 2019.