In this month’s Aircraft Comparative Analysis, Mike Chase provides information on three popular business jets for the purpose of valuing the Hawker 800XP. A 2005 model Hawker 800XP has a list price of $3.5m.
Over the following paragraphs, we’ll consider productivity parameters (payload/range, speed and cabin size) and cover current and future market values for the Textron Hawker 800XP. The field in this study includes the Citation Sovereign and Learjet 60 business jets. Combined, these three models have over 1,000 aircraft in operation today (see Table A).
The Hawker 800XP is a derivative from the design of the UK-built de Havilland/Hawker Siddeley and British Aerospace 125 that was first built in 1962. The Hawker 125 evolved into the Series 400 through 800, and was produced up to 1993 when Raytheon purchased the Series 800 program and the aircraft was renamed the Hawker 800.
The 800 series has a number of modifications and changes over the 700 series, including improved payload capabilities, updated systems, and enhanced performance from an improved wing (incorporating new outer wing sections). Hawker 800 aircraft, which numbered 292 units, ceased being manufactured in 1995 when the 800XP entered service. The 800A (230 built) was specifically produced for the US market and the 800B (62 built) was for non-US markets.
The Hawker 800XP features an uprated engine, enhanced aerodynamics, increased weight and system upgrades compared with preceding models. The Hawker 800XP was manufactured between 1995 and 2005, and the number of units built in that timeframe totaled 426 aircraft, with 421 still in service today. Five have been retired.
The Hawker 800XP features Honeywell TFE-731-5BR-1H engines. It is RVSM certified from the factory after serial number 258359, or when service bulletin SB-34-3110 (Honeywell) or SB-34-3166 (Collins) is implemented. Textron Aviation purchased the Hawker aircraft product line in March 2014 and has integrated the Cessna, Beechcraft and Hawker aircraft brands.
There are 380 wholly-owned Hawker 800XP aircraft in operation worldwide. In addition there are ten Hawker 800XPs in shared ownership and 25 in fractional ownership. By continent, North America has the largest fleet percentage at 74%, followed by Asia (9%), for a combined total of 83%. Additionally, 35 (8.3%) of the fleet currently in operation consists of leased aircraft, according to JETNET.
Payload & Range
The data contained in Table B are published in the B&CA, May 2015 issue, but information is also sourced from Conklin & de Decker. As we have mentioned in past articles, a potential operator should focus on payload capability as a key factor. The Hawker 800XP ‘Available Payload with Maximum Fuel’ at 1,750 pounds is greater than the Sovereign (1,177 pounds) and Learjet 60 (1,068 pounds).
In addition, Table B shows the fuel usage by each aircraft in this field of study, per Aircraft Cost Calculator. The Learjet 60 is the most frugal at 215 gallons per hour (GPH). The Hawker 800XP (262 GPH) burns the most fuel per hour of the study aircraft.
According to Conklin & de Decker, the Hawker 800XP cabin volume is 551 cubic feet. The Sovereign has slightly more cabin volume at 571 cu ft, however, the cabin length of the Sovereign (25.25 feet) is longer than the Hawker 800XP at 21.3 feet. The Learjet 60 is smaller in cabin volume (447 cu ft) and shorter in length at 17.67 ft compared to the other aircraft in the field of study. Chart A (courtesy of UPCAST JETBOOK) provides side-by-side cabin cross-section comparisons.
As depicted by Chart B and using Witchita, Kansas as the origin point, the Sovereign shows greater range coverage than the Hawker 800XP and Learjet 60, although all three jets reach most of the lower 48 states, Canada and Mexico non-stop. The range details depicted are sourced from 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.
As mentioned previously, the Hawker 800XP is powered by two Honeywell TFE 731-5BR engines, each with a thrust rating of 4,660 pounds. The Sovereign and Learjet are powered by a pair of Pratt & Whitney Canada PW306C and PW305A engines, respectively, offering a thrust rating of 5,770 and 4,600 pounds.
Cost Per Mile
Using data published in the May 2015 B&CA Planning and Purchasing Handbook and the August 2015 B&CA Operations Planning Guide, we will compare our aircraft. The nationwide average Jet-A fuel cost used was $5.25 per gallon at press time, so for the sake of comparison we’ll chart the numbers as published.
Note: Fuel price used does not represent an average price for the year.
Chart C details ‘Cost per Mile’ and compares the Hawker 800XP to its competition, factoring direct costs with each aircraft flying a 1,000nm mission with an 800 pound (four passengers) payload. The Hawker 800XP shows the highest cost per nautical mile at $5.14 compared to the Sovereign ($4.47) and Learjet 60 ($4.05).
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 Hawker 800XP computes at $2,126 per hour, which is 9.4% more than the Sovereign ($1,944 per hour) and 21.6% more than the Learjet 60 ($1,749 per hour).
Aircraft Comparison Table
Table C contains the pre-owned prices from Vref Pricing Guide for each aircraft (2005 model). 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 Hawker 800XP has 11.9% of its fleet currently ‘For Sale’ and the Learjet 60 has 12.9% for sale. However, the Sovereign has a lesser percentage ‘For Sale’ at 7.2%. The average number of used transactions (sold) per month during the past 12 months for the Hawker 800XP is higher at just over five per month than the Sovereign and Learjet (4.5 each), as shown in the last column of the table.
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 D).
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 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 E depicts an example of using the MACRS schedule for a 2005 Hawker 800XP aircraft in private (Part 91) and charter (Part 135) operations over five and seven-year periods, assuming a used retail value of $3.5 million, per Vref Pricing guide.
Asking Prices vs Age, Quantity & Engines
Chart E, sourced from the Multi-dimensional Economic Evaluators Inc. (www.meevaluators.com), shows a Value and Demand chart for the pre-owned Hawker 800XP including the Sovereign and Learjet 60 aircraft. The current pre-owned market for the Hawker 800XP shows a total of 50 aircraft ‘For Sale’ with twenty-six displaying an asking price, thus we have plotted those twenty-six.
We also added other pre-owned business jets from our study group with asking prices ranging from $1.0m-9.6m. 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. Thus, the market for used Hawker 800XPs responds to at least four features: Years, AFTT (hours), Quantity and Price.
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:
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 Hawker 800XP displays a high level of productivity.
Popular attributes of the Hawker 800XP are a significantly higher payload capability compared to the aircraft in our analysis. However, costs per mile and per hour are higher for the Hawker 800XP, although pre-owned asking prices are competitive. Operators should weigh their mission requirements precisely when picking the option that is the best for them.
Exclusive to our online content, Chart G displays the Hawker 800XP and depicts the Maximum Maintenance Equity that the aircraft has available, based on its age.
• Note: 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.
• Also Note: The percent of the Maximum Maintenance Equity that an average aircraft will have available (based on its age) assumes:
- Average annual utilization: 410 Flight Hours;
- All maintenance is completed when due.
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, however.
The Hawker 800XP continues to be very popular today. Those operators in the market should find the preceding comparison useful. Our expectations are that the Hawker 800XP, which started delivering in 1995 and ended production in 2005, will continue to do very well in the pre-owned markets for the foreseeable future.