In this month’s Aircraft Comparative Analysis, Mike Chase provides information on two popular single-engine turboprop aircraft for the purpose of valuing the DAHER TBM 850.
Within this study, we’ll consider the productivity parameters (payload/range, speed and cabin size) and cover current and future market values. The field in this comparative study includes the Pilatus PC-12 NG. Can a smaller cabin, but quicker single-engine turboprop compete against a larger, but slower turboprop?
In the designation TBM, "TB" stands for Tarbes, the French city in which Socata is located, while the "M" stands for Mooney. The TBM 850 is a single-engine turboprop that was awarded an FAA type certification on February 23, 2006, and EASA type certification on November 28, 2006. It was built from 2006 to 2014 as a six to seven-seat low-wing monoplane with an improved version of the more-powerful Pratt & Whitney PT6A-66D engine flat rated at 700 shp.
The TBM 850 is limited to 700 shp for takeoff and landing, but flatrating enables the aircraft to maintain that power output to higher altitudes and have more available power for cruise. Therefore it flies faster at altitude than its predecessor, the TBM 700.
Beginning with the 2008 model, the TBM 850 is equipped with the Garmin G1000 integrated flight deck as standard equipment. Introduced in 2014, the TBM 900 is an improved version with 26 modifications including winglets, a redesigned air intake and a 5-blade propeller, for better aerodynamics and performance.
There are 331 wholly-owned TBM 850 aircraft in operation worldwide with nine in shared ownership and one in fractional ownership. By continent, North America has the largest percentage at 80%, followed by Europe at 11% and South America at 6% for a combined total of 97%. Additionally, eight of the TBM 850 fleet are leased according to JETNET.
Payload & Range
The data contained in Table A are sourced from Conklin & de Decker and B&CA’s May 2015 edition. A potential operator should focus on payload capability. The ‘Available Payload with Maximum Fuel’ for the TBM 850 is 931 lbs, which is less than the PC-12 NG (1,009 pounds).
We can also see the fuel usage by each aircraft model in this comparative field of study. The TBM 850 at 73 gallons per hour (GPH) burns more fuel than the PC-12 NG at 70 GPH as sourced from Aircraft Cost Calculator.
Cabin Cross Sections
According to Conklin & de Decker, the TBM 850 is considerably smaller than the PC-12 NG in all respects. The cabin volume (356 cubic feet) of the PC-12 NG is 2.5 times that of the TBM 850 (143 cubic feet). Chart A, courtesy of UPCAST JETBOOK, represents the cabin cross-sections for the two models. What is not represented is that the PC-12 NG cabin length – at 16.92 ft. - is longer than the TBM 850’s (10.0 ft).
As depicted by Chart B, using Witchita, Kansas as a starting point (80% of TBM 850s are located within North America) the PC-12 NG shows more range coverage than the TBM 850, according to 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 TBM 850 and PC-12 NG are both powered by a single Pratt & Whitney Canada powerplant. The TBM 850 uses the PT6A-66D flat rated at 700 shp. The PC-12 NG utilizes the PT6A-67P single-engine at a much higher rated 1,200 shp. (The maximum flight level ceiling for the TBM 850, incidentally, is 31,000ft and for PC-12 NG 30,000 ft.)
Cost Per Mile
Using data published in the May 2015 B&CA Planning & Purchasing Handbook and the August 2014 B&CA Operations Planning Guide we will compare our aircraft. The nationwide average Jet-A fuel cost used from the August 2014 edition was $6.18 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 TBM 850 to its competition factoring direct costs and with both aircraft flying a 600nm mission with 800lbs (four passengers) payload. The TBM 850 has a lower cost per nautical mile at $1.97, 14.3% less compared to the PC-12 NG at $2.30.
Total Variable Cost
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 TBM 850 is $608 per hour (2.1% lower) than the PC-12 NG at $621.
Aircraft Comparison Table
Table B contains the used retail prices from Vref 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.
The TBM 850 and PC-12 NG have less than 10 percent of their respective fleets currently ‘For Sale’. However, the PC-12 NG has a higher number of retail sale transactions at 126 compared to 77 for the TBM 850 over the past 12 months. That’s an average of 10.5 and 6.4 monthly sales respectively.
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 commercial 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 offers an example of using the MACRS schedule for a 2014 model TBM 850 aircraft in private (Part 91) and charter (Part 135) operations over five and seven-year periods, assuming a used retail value of $3.25m (as sourced from Vref).
Asking Prices vs Range, Age and Quantity
Chart E, sourced from the Multi-dimensional Economic Evaluators Inc. (www.meevaluators.com), shows a Value and Demand chart for the pre-owned TBM 850 and several other single-engine turboprop models including the PC-12 NG. The current pre-owned market for the TBM 850 shows a total of 30 aircraft ‘For Sale’ with nine displaying an asking price, thus we have plotted those nine aircraft.
We also added other pre-owned single-engine turboprops of similar ilk, with asking prices ranging from $0.85-4.2m. The equation that we derived from these asking prices and other criteria used should enable sellers and buyers to compare, and perhaps adjust their offerings, if necessary.
Demand and Value are on opposite sides of the same Price Axis. As depicted, the market for a used TBM 850 responds to at least four features: Years, AFTT, Horsepower and Quantity.
The points in Chart F are centered on these two turboprop 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:
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.
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 TBM 850, as shown in the productivity index is productive when compared with PC-12 NG - largely due to the fact that the TBM 850 competes head-on with the PC-12 NG, offering a lower variable cost per hour and cost per mile. However, it does burn 4.3% more fuel (GPH) than the PC-12 NG. The TBM 850 also has a smaller cabin and a shorter range – but offers a 22% higher long-range cruise speed (255kts vs. 209kts).
There are characteristics to be considered when buying a TBM 850, such as the lower price at $3.250m ($1.250m less than the PC-12 NG). Operators should evaluate their mission requirements precisely when picking the option that is best for them.
Within the preceding paragraphs we have touched upon several of the attributes that business aircraft operators value in an aircraft. There are other qualities such as airport performance, terminal area performance, and time-to-climb performance that might factor in a buying decision, too, however.
The TBM 850 continues to be very popular in the pre-owned market today. Those operators in the market should find the preceding comparison of value. Our expectations are that the TBM 850, which started delivering in 2006, will continue to do very well in the pre-owned market for the foreseeable future.
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