How does the used Gulfstream G200 compare in the market today? Mike Chase considers productivity parameters (payload, range, speed and cabin size) and covers current market values. The field in this study includes the Bombardier Challenger 300 and Dassault Falcon 2000.
Gulfstream G200 Private Jet
How does the used Gulfstream G200 compare in the market today? Over the following paragraphs, Mike Chase considers productivity parameters (payload, range, speed and cabin size) and cover current market values. The field in this study includes the Bombardier Challenger 300 and Dassault Falcon 2000.
The original Galaxy 1126 first flew on Christmas day 1997 and is a Super Mid-size jet. By December 1998 it had received certification from the US and the Israeli aviation authorities. Deliveries began in 1999. Powered by a pair of 5,700lbst Pratt & Whitney Canada PW306 powerplants, this Galaxy model was designed with a new, wider fuselage with seating configurations for 8-10 passengers and a stand-up cabin. Attached to the fuselage were strengthened Astra SPX wings with integrated winglets.
When General Dynamics (GD) announced the acquisition of Galaxy Aerospace Company from Israel Aerospace Industries, it included the type certificates for the entire family of aircraft, which were subsequently placed with Gulfstream which it had previously acquired.
General Dynamics chose to rename the Astra and Galaxy models the Gulfstream G100 and G200, respectively. Under the arrangement, IAI would continue to manufacture the G100 and G200 aircraft in Israel and fly the jets for interior completion to Gulfstream in the US.
The final G200 rolled off the production line in December, 2011 after a total 250 units had been built over the years. In 2005, Gulfstream had started designing a follow-on G250 aircraft which was later renamed the G280 and began deliveries in 2012.
Of 250 G200s built, there are still 245 in-operation globally: 237 are wholly-owned while eight are in shared ownership (none are in fractional ownership programs). Just less than 10% of the G200s are leased, and just over a quarter of the in-operation G200s (28%) are in fleet ownership. The largest fleet operators are US-based Clay Lacy, EJI and Jet Linx, each with four Gulfstream G200s.
North America is home to the largest G200 fleet percentage (72%), followed by Asia (13%) and then Europe (9%), accounting for a combined 94% of the world’s fleet.
According to JETNET, as of January 2018 the Gulfstream G200 fleet comprised of 22% having one owner since new vs 78% being sold on the used jet market. The fleet percentage ‘For Sale’ (as of this writing) is 13.1%, with 87.5% under an exclusive broker agreement. Average days on the market for the G200 is currently 265 days.
Status of ADS B-Out Equipage
Of the 245 Gulfstream G200 jets worldwide, 93 (38%) are ADS-B Out equipped, leaving 62% of the fleet yet to comply. The FAA has mandated that all US-operated business jets must comply with this new requirement by January 1, 2020.
Payload & Range
As we have mentioned in past articles, a potential operator should focus on payload capability as a key factor. The Gulfstream G200 ‘Available Payload with Maximum Fuel’ at 650lbs is considerably less than that offered by the Challenger 300 (1,105lbs) and the Falcon 2000 (1,095lbs), see Table A.
TABLE A - Payload & Range Comparisons
Cabin Cross-Section Views
Chart A shows a cabin cross-section comparison with the Gulfstream G200 offering less width (7.2ft) than the Falcon 2000 (7.7ft) but slightly more than the Challenger 300 (7.17ft). However, the height of the Gulfstream G200 (6.25ft.) is greater than the Challenger 300 (6.08ft) and the Falcon 2000 (6.2ft).
CHART A - Cabin Cross-Section Comparison
The Gulfstream G200 cabin length is greater (24.5ft) than the Challenger 300 (23.7ft), though the Falcon 2000 has the longest cabin in the study (31.2ft). According to Conklin, the Gulfstream G200 has the smallest cabin volume at 869 cubic feet compared to the rest of the field. By comparison, the Challenger 300 offers 930cu.ft and the Falcon 2000 1,028cu.ft.
As depicted by Chart B using Dallas – Love Field Airport as the origin point, the Gulfstream G200 shows more range coverage (3,530nm) than the Challenger 300 (3,340nm) and the Falcon 2000 (3,130nm). Each business jet’s range covers all of North America, Central America and the northern part of South America.
CHART B - Range Comparison Map
Note: For jets and turboprops, ‘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 Gulfstream 200 is powered by two Pratt & Whitney Canada PW306A turbofan engines each with 6,040lbst. The Challenger 300 is powered by two Honeywell HTF7000 turbofan engines with 6,826lbst each, and the Falcon 2000 is powered by two General Electric CFE 738-1-1B turbofans each offering 5,918lbst.
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 Gulfstream G200 computes at $2,862 per hour, which is 20% less than the Falcon 2000 ($3,583), but is more than the Challenger 300 ($2,784).
CHART C - Variable Cost Comparison
Aircraft Comparison Table
Table B contains the 2005 used prices for each aircraft, as sourced from Vref. The average speeds and ranges are from Conklin & de Decker, while the number of aircraft in operation, the fleet percentage ‘For Sale’ and average sold are as reported by JETNET.
TABLE B - Aircraft Comparison Table
The Gulfstream G200 had 13.9% of its fleet ‘For Sale’ as of January 2018. By comparison, the Challenger 300 had 5.5% of its fleet listed ‘For Sale’ and the Falcon 2000 had 9.6% ‘For Sale’. The average number of used transactions (sold) per month is five each for the Gulfstream G200 and Falcon 2000, and an average of six per month for the Challenger 300.
Maximum Scheduled Maintenance Equity
Charts D displays the Maximum Maintenance Equity the Gulfstream G200 has available, based on its 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).
CHART D - Maximum Scheduled Maintenance Equity (Gulfstream G200)
The percent of the Maximum Maintenance Equity that an average aircraft will have available based on its age assumes an average annual utilization of 330 flight hours, and that all maintenance is completed when due.
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).
TABLE C - Tax Depreciation Schedule
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 straightline 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 D depicts an example of using the MACRS schedule for a 2011 model Gulfstream G200 business aircraft in private (Part 91) and charter (Part 135) operations over five- and seven-year periods, assuming a 2011 list price for a Gulfstream G200 at $6.6m (per Vref).
TABLE D - MACRS Schedule for 2011 Model G200
Asking Prices & Quantity
The current used market for the Gulfstream G200 aircraft shows a total of 34 aircraft ‘For Sale’ with 13 displaying an asking price ranging from $2.495m up to $5.95m. We also reviewed the used Challenger 300 market (27 ‘For Sale’) with eight asking prices ranging between $5.7m and $10.29m. There were 19 Falcon 2000s ‘For Sale’ with six asking prices ranging from $3.5m to $6.995m.
Each aircraft serial number is unique. The Airframe hours (AFTT) 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 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 Gulfstream G200 displays a high level of productivity.
CHART E - Productivity Comparison
Selecting a 2005 model aircraft (a year all three aircraft in our field were in production together), the Gulfstream G200 business jet can be acquired at a lower price than a 2005 model Challenger 300 or Falcon 2000 (per Vref). The G200 also offers longer range, but it has a smaller cabin volume compared to the Challenger 300 and Falcon 2000. In addition, the G200 has the lowest ‘Available Payload with Maximum Fuel’ number in this field of study.
The Falcon 2000, meanwhile, has the largest cabin volume but the highest variable costs and less range, while the Challenger 300 has the lowest variable cost per hour of the competitors. 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 that might factor in a buying decision, however.
The Gulfstream G200 continues to be popular today. Those operators in the market should find the preceding comparison useful. Our expectations are that the Gulfstream G200 will continue to do well in the used market for the foreseeable future. Of course, if the Gulfstream G200 is not outfitted with ADS-B Out, it cannot be placed in service after December 31, 2019, as mandated by the FAA.