Gulfstream G650 Jet
Senior Certified Aircraft Appraiser Jeremy Cox spotlights aircraft makes and models and their value points. This month, the focus is on used Gulfstream jets for sale…
Reviewing the value of used Gulfstream business jets begins by considering the specifics of certain models. For example, in the Large Cabin & Long Range category, the average G550 is projected by the Aircraft Bluebook to accumulate 425 flight hours annually.
Looking at the current G550 ‘For Sale’ market, there are 39 aircraft available from a fleet total of 529. The average TTAF (total time on the airframe) of those jets ‘For Sale’ is 2,865 hours, and their landing cycles average 937.
Those statistics equate to a ratio of just over three flight-hours per landing. The average Year of Manufacture of the ‘For Sale’ G550 is 2007 (10 years old).
Meanwhile, the average GIV-SP is currently projected by Bluebook to accumulate 410 hours annually. The current GIV-SP ‘For Sale’ market (38 aircraft out of a fleet of 293) shows an Average TTAF of 6,513 hours and an average of 2,823 landing cycles.
These data equate to an average of approximately 2 hours and 20 minutes flight time per landing). The average Year of Manufacture of the ‘For Sale’ GIV-SP is 1998 (19 years old).
Looking at the Mid-Size Cabin jets, the average G200 is projected by Bluebook to accumulate 380 hours annually, and the 34 aircraft ‘For Sale’ out of a fleet of 245 yield an Average TTAF of 3,411 hours and an average of 2,091 landing cycles. That’s a ratio of approximately 1 hour, 40 minutes flight-time per landing. The average Year of Manufacture of the ‘For Sale’ G200 is 2006 (11 years old).
Finally, the G150 is projected by Aircraft Bluebook to accumulate 390 hours annually. The current G150 ‘For Sale’ market (eight aircraft from a fleet of 123) shows an Average TTAF of 2,541 hours and an average of 1,643 landing cycles (an average of just over 1 hour, 30 minutes flight time per landing). The average Year of Manufacture of the ‘For Sale’ G150 is 2007 (10 years old).
Used Gulfstream Model Challenges
Legacy Gulfstreams powered by Rolls-Royce Spey engines must be equipped with a Stage-III compliant hush-kit; a factor that has severely diminished the fleet in service. Thus, almost 50% of the original GII and GIII fleet have been retired, with many being ‘culled’ in the last three years as a direct result of the Stage-III noise compliance mandate that went into effect on 01/01/16.
A further issue exists within the market for used Spey engines, in that most of the ‘as-removed’ engines from parted-out aircraft have now reached their 10-year corrosion life-limit, thereby restricting the previously ready supply of engines that provided an alternative to spending on overhauls. The cost of those overhauls amount to more than what the subject aircraft is probably worth.
The residual value of a 1987 Gulfstream GIII is currently around 8% of its original value, based upon a list price of US$13.0m when purchased new in 1987.
Aircraft take a ‘hit’ when production of that model is either ceased or is superseded by a newer model. Having ceased production in 2002, the residual value of a 2002 model Gulfstream GIV-SP is around 23% of its new value. Further examples include the G200, replaced by the G280. The residual value of a 2002 model Gulfstream G200 is about 18% of new.
Finally, FANS 1/1A and ADS-B still pose issues for some of the older large-cabin Gulfstream models. Even though the avionics industry warns that owners should be acting now because shop openings and solution kits are both in short supply, I personally believe that waiting may still be the right approach for some. I see prices continue dropping as more and more ADS-B solutions are being brought to market.
New Paradigms of Used Jet Values
Since January 2010 there have only been 34 transactions on 26 Gulfstream GI aircraft. Of these, more than a third led to a Part-Out or Write-Off of the subject aircraft.
Further, without a Stage III Hush-kit, all GII, GIIB, and GIII aircraft struggle to break $100,000 for part-out value. With a Stage III Hush-kit and all maintenance up-to-date, however, these aircraft often trade in the $300k to $700k range. Sometimes a late model GIII might break $1.0m, but that is a very rare occurrence.
Straight GIV jets without the ASC 190 -SP modification (which is fairly rare today) will usually trade at well below $4.0m. A good GIV-SP enrolled with Rolls-Royce CorporateCare and with decent time remaining before its 5,000 hour landing inspection and other similarly expensive events, will still fetch a price in the $6.0m range.
The early GV models are now 22 years old. For some, the selling prices are below $10.0m, which equates to a residual value of about 24% of new.
Of the more recent Gulfstream models:
• G150 values range typically between $4.5 - 7.0m;
• G200 jets range from $3.0 - 6.0m;
• G280s trade in a narrow band between $14.0 - 18.0m;
• G450s fetch between $13.0 - 21.0m;
• G550s plumb new depths, with the latest asking prices ranging from the low-teens to the high-$30m bracket. A 2003 Gulfstream G550 is valued at about 36% of its new value.
• Non ‘ER’ G650s have dipped below $50.0m for the first time and continue to fall.
Following is a list of Appraised Value Add-Ons for each Gulfstream model (numbers per my evaluation, not the value guides):
• Gulfstream G100 (Astra SPX) APU - $130,000
• Gulfstream G150/G200 Auto Throttles - $150,000
• Gulfstream GII/IIB Aviation Partner Winglets - $150,000; Stage III Hush-kit - $400,000 (downward variable value)
• Gulfstream GIV/IV-SP ASC 190 - $300,000; FANS 1/1A - $180k to $300k;
• Gulfstream G350/G450 FANS 1/1A - $180k to $300k;
• Gulfstream GV No Forward Lavatory - ($250,000 Deduction); FANS 1/1A - $180k to $300k
• Gulfstream G550 Aft Galley - ($500,000 Deduction); No Crew Rest Area - ($250,000 Deduction)
• Gulfstream G650 ‘ER’ Modification - $1,000,000.