- 01 Jan 2021
- Mike Chase
- Jets Comparison
How does Embraer’s newly-certified Praetor 600 compare with the Legacy 500? What are the advantages offered by each model and which particular market niche(s) do they fill? Mike Chase analyses their performance side-by-side…Back to Articles
Here, we’ll consider key productivity parameters for the Embraer Praetor 600 and Legacy 500 (including payload, range, speed and cabin size), to establish which operator needs these aircraft are designed to meet. How much of a performance enhancement does the Praetor 600 offer over its predecessor?
Embraer has spoken much over the past few years about ‘Disruptive Technology’. What exactly does it mean by this, and does its new Praetor aircraft represent disruptive technology within the Business Aviation sector?
We’ll keep these questions in mind. Specifically, disruptive technology is defined as “the process in which a smaller company, usually with fewer resources, challenges an established business by entering at the bottom of the market and continuing to move up-market with technological innovations that disrupt the status quo.”
Embraer Praetor 600
Through its Praetor 500 and 600 models, Embraer introduced improved variants of its Legacy 450 and 500 models, respectively. The Embraer Praetor 600 was subsequently certified by the FAA and EASA in 2019.
Based on the Legacy 500, the $20.995m Praetor 600 has two fuel tanks on the fuselage belly allowing 2,928lbs additional fuel capacity. It also utilizes more powerful 7,528lbst Honeywell HTF7500E engines, while a much longer wingspan combines to offer an NBAA IFR range of 4,018nm (carrying four passengers and available fuel) – making it competitive with the Cessna Citation Longitude and Gulfstream G280 Super Mid-Size Jets.
The Praetor 600 began deliveries in H2 2019, and there were 24 wholly-owned Praetor 600s in operation at the time of writing, with none yet in shared or fractional ownership. However, Embraer has received a $1.4bn order from fractional provider Flexjet LLC that includes Praetor 600 jets.
Embraer Legacy 500
The Legacy 500 was the first Super Mid-Size business jet with digital flight controls and full fly-by-wire. The Embraer Legacy 500 was certified on August 12, 2014. Like the Praetor 600, two Honeywell HTF7500E engines power the Legacy 500, each with a lower 7,036lbst.
Legacy 500 production was scheduled to end after 2020, and, at the time of writing, there were 81 wholly-owned Legacy 500 jets in operation worldwide, with two more in shared ownership, and one in fractional – giving a fleet total of 84 units.
When comparing aircraft, an important area for potential operators to focus on is payload capability, and especially the ‘Available Payload with Maximum Fuel’.
Table A shows the Embraer Praetor 600’s Available Payload with Maximum Fuel to be 2,194lbs., which is greater than the 1,799lbs. offered by the Legacy 500.
TABLE A: Embraer Praetor 600 vs Embraer Legacy 500 Payload Comparison
As shown in Chart A the Praetor 600 and Legacy 500 share cabin cross-section dimensions. They also have the same cabin length (24.1ft) and volume (840cu.ft). Baggage volume for both jets is 45cu.ft (internally) and 110cu.ft (externally).
CHART A: Embraer Praetor 600 vs Embraer Legacy 500 Cabin Comparison
As mentioned, the main difference between the two jets come in the external dimensions of the wingspan. Otherwise, the jets are very similar.
As depicted in Chart B, using Melbourne, Florida as the start point the Praetor 600 offers greater range coverage (4,018nm) than the Legacy 500 at 3,125nm, both with four passengers and available fuel.
Note: For business jets, ‘Four 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: Embraer Praetor 600 vs Embraer Legacy 500 Range Comparison
Fuel Burn Comparison
The two higher-thrust Honeywell HTF7500E engines powering the Praetor 600 burn 258 gallons per hour (gph) fuel. By comparison, the Legacy 500’s lower-thrust HTF7500E turbofans burn approximately 10% less fuel at 238gph fuel.
Cost per Mile Comparison
Chart C details ‘Cost per Mile’, comparing the Embraer Praetor 600 and the Legacy 500, and factoring direct costs with all aircraft flying a 1,000nm mission with an 800lbs (four passengers) payload. The Praetor 600 has the highest cost per nautical mile at $7.82, which is 6% more than the Legacy 500 ($7.38 per nautical mile).
CHART C: Embraer Praetor 600 vs Embraer Legacy 500 Cost Per Mile Comparison
Total Variable Cost Comparison
The ‘Total Variable Cost’, illustrated in Chart D, is defined as the estimated cost of fuel expense, maintenance labor expense, scheduled parts expense, and miscellaneous trip expense (hangar, crew and catering).
CHART D: Embraer Praetor 600 vs Embraer Legacy 500 Variable Hourly Cost Comparison
These costs do not represent a direct source into every flight department and their trip support expenses. Therefore, for comparative purposes the costs presented are the relative differences, not the actual differences since these may vary from flight department to flight department.
Embraer’s Praetor 600 shows a higher variable cost at $2,679/hour compared to the Legacy’s $2,416/hour; a difference of $263, or 10.9%.
Market Comparison Table
Table B contains the new prices (per B&CA) for a 2020 model Embraer Praetor 600 and Embraer Legacy 500. The long-range cruise speed and range numbers are also from B&CA, while the cabin volumes are from the OEM.
Meanwhile, the number of aircraft in-operation, the percentage for sale, and the average sold are from JETNET. The Praetor 600 had no aircraft for sale on the used aircraft market at the time of writing, while 7.1% of the Legacy 500 fleet was available for sale. The average number of new and used transactions (units sold) per month over the past 12 months was one each.
TABLE B: Embraer Praetor 600 vs Embraer Legacy 500 Market Comparison
Aircraft that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS). Here, 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 (see Table C).
TABLE C: MACRS Tax Depreciation Schedule for Business Aircraft
In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favourable Alternative Depreciation System (ADS), 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 is 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 (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 this 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 D depicts an example of using the MACRS schedule for a 2020-model Embraer Praetor 600 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods.
TABLE D: Embraer Praetor 600 Sample MACRS Tax Depreciation Schedule
Table E, meanwhile, depicts an example of using the MACRS schedule for a 2020-model Embraer Legacy 500 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods.
TABLE E: Embraer Legacy 500 Sample MACRS Tax Depreciation Schedule
Asking Prices & Quantity
In December 2020, there were no Praetor 600 business jets available on the pre-owned market. By comparison, six Legacy 500s were available, but with all six inviting offers there was no asking price data to share.
While each aircraft 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 jet – even between two aircraft from the same year of manufacture. Therefore, a final negotiated price must be decided between the seller and buyer before the sale of an aircraft is completed.
The points in Chart E are centered on the Embraer Praetor 600 and Embraer Legacy 500 only, and highlight how the Praetor 600 performs as an upgrade on the Legacy 500. Pricing used in the vertical axis is as published in the B&CA Equipped Price 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.
CHART E: Embraer Praetor 600 vs Embraer Legacy 500 Productivity Comparison
As of June/July 2020, a new Praetor 600 had a slightly higher price ($20.995m) than a new Legacy 500 ($19.995m) and has a higher hourly variable operating cost. But it also offers greater range and Available Payload with Full Fuel.
Super Mid-Size Jet Productivity Comparison
The points in Chart F, meanwhile, display the Praetor 600 and Legacy 500 in the wider context of the Super Mid-Size Jet market. Again, the pricing used in the vertical axis is as published in the B&CA Equipped Price Guide.
CHART F: Super Mid-Size Jet Category 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.
Let’s circle back to the question posed at the outset: ‘Is the Embraer Praetor 600 an example of disruptive technology?’ While new to the market, the Praetor 600 offers best-in-class range with four passengers (at over 4,000nm), all at a lower price point. These are often critical factors to business jet buyers.
Therefore, while upgrading its Legacy 500, Embraer’s Praetor 600 simultaneously appears to have provided an example of ‘disruptive technology’ within the Super Mid-Size Jet market.
Our Jet Comparison should also show that operators should weigh up their mission requirements precisely when picking which jet is the best for them, however. There is much for a prospective buyer to consider when deciding which aircraft, and which performance criteria is better suited to them.