April 1, 2000
By Peter A. Bedell
You’re the chief pilot in a corporate flight department, and the company CEO walks in with the latest copy of the Wall Street Journal and points to an advertisement claiming that a new business jet can fly Mach 0.86, has a range of 3,000 nm, and can carry 10 people and their luggage.
Knowing that the manufacturer’s marketing department has drummed up the figures, you are naturally suspicious. You don’t doubt that the airplane can do all of those things; the question in your mind is whether the airplane in question can do all of those tasks at the same time. Most likely, the Mach 0.86 speed can only be reached at a power setting and altitude where the engines burn so much fuel that the range falters to 1,600 nm. Likewise, the 3,000-nm range can only be achieved following a direct climb to Flight Level 410 and cruising at a comparatively slow Mach 0.75, followed by an uninterrupted descent to the destination—with only enough fuel remaining for VFR reserves.
You get the idea. But to a CEO with limited aviation background, information in the Journal may be taken as gospel, says Aircraft Acquisition Planning, a book published by Conklin & deDecker Aviation Information. Such situations are played out every day in the business aviation world, where old wives’ tales thrive and reality is generally seen only in the flight department’s bottom line.
When purchasing a new airplane, pilots and aircraft owners take a much closer look at the total expense of operating their current ride vs. the airplane(s) they are considering. There are a few ways to go about doing such an analysis. The old-fashioned way is to play detective and talk to other owners and operators of the types in question. You can also obtain information from the manufacturers of the candidate airplanes.
Talking to the manufacturer could bring a mixed bag of potentially biased information. Knowing how to sift through the salesmanship and take the pertinent advantages from the manufacturer is a valuable skill. But be aware that talking to a manufacturer takes away your anonymity, and you then may be a sales associate’s best friend for some time.
Similarly, you should be careful when querying other operators. A private owner of a Cessna CitationJet who flies 150 hours a year will provide a completely different cost figure than the charter operator who flies 500 hours a year in the same airplane under Part 135 regulations. Likewise, two Beech King Air 200 operators at the same airport flying about the same amount of time per year, under the same regulations, can still come up with vastly different figures. Everyone is a self-proclaimed expert, and your results depend completely on who you’re talking to. Unless you find a supremely knowledgeable and trusted source with a similar operating profile to yours, there are likely too many variables to consider in such a situation to get an accurate gauge of what the costs are going to be for you.
It is for these reasons that a few third-party companies such as Aviation Research Group/U.S. (Arg/us) and Conklin & deDecker perform many services to aid those in search of real-world cost figures and serious prepurchase planning. Some of the services are expensive, but choosing the wrong airplane can be a much more costly affair. If nothing else, the reports generated by these companies provide the prospective buyer with the comfort of knowing that he or she is making the most informed decision possible. You can expect the same level of service from an independent aviation consultant, although he or she may not be intimate with more than a handful of aircraft types. They will also be likely to charge as much or more for their services.
We looked over operating cost reports from both Arg/us and Conklin & deDecker and found that they were very complete and provided exhaustive detail regarding costs. Hand one of these reports to the CEO, and he’ll be impressed. Conklin & deDecker’s reports provide an accurate and detailed real-world account of expected operating costs of everything from two-place piston singles to Boeing’s 747-400, as well as most helicopters. Each report costs $49 to $99, depending on the type of aircraft. Arg/us currently provides its $49 reports for business jets and turboprops and the Sikorsky S–76 helicopter.
We also looked over the Aircraft Comparator from Conklin & deDecker, a three-ring notebook filled with specifications, performance figures, and other critical information for popular models in a particular segment, such as twin turboprops. Depending on type of aircraft, the Comparator lists for $315 to $675. We especially liked the transparent overlays of each printed page, which allow you to overlay, for example, the cabin floor plan of a Cessna Conquest on that of a Beech King Air. Arg/us is working on a CD-ROM-based program that will allow the user to make similar comparisons using actual photographs of interiors. Due for release soon, the software will contain cost and operational information, as well as allow the user to plug in airport-to-airport flight plans in several different kinds of business airplanes to analyze each airplane’s load vs. range characteristics.
This is a question that isn’t so easy to answer. It’s tough to swallow the cost of a new airplane, but there are some major advantages to buying new. Perhaps the most critical advantage is the ability to have the airplane configured the way you or your company wants it—not the way the previous owner wanted it. Avionics, interior layout, and paint scheme are done your way. You also get greatly reduced maintenance costs, thanks to a warranty that will likely take care of any problems you may encounter in the first few years. In addition, maintenance costs overall will likely be lower with a new airplane, even after the warranty expires.
The used alternative brings a low initial cost and quick availability. Of course, the disadvantages are the configuration of the cabin, age of the avionics, and higher maintenance costs. Even maintaining a late-model business aircraft to high standards can get costly. We spoke with one chief pilot whose company operates a 1994 Cessna Citation VI. Although it’s a nice, late-model airplane, it has a maintenance-intensive and already-obsolete flight management system, no RVSM approval, no TCAS, and no GPWS—items that will eventually become mandated equipment in business jets. Instead of throwing hundreds of thousands of dollars (plus the associated downtime and proving runs) required to install and certify the new equipment and approvals for this airplane, he wants the company to consider a new Citation X. Besides the performance gains of the new airplane, the cockpit will be furnished with the latest avionics, including GPWS, TCAS, and factory RVSM approval. Of course, the new airplane will also come with a five-year warranty.
Another issue affecting the purchase of used airplanes is the increasing restrictions on noise. Older airplanes are being shunned at more and more airports as Stage III restrictions go into effect. Modifications, such as the installation of hush kits that are required for existing airplanes to meet the Stage III requirements, are a potential investment to be aware of before purchasing what may appear to be the deal-of-the-century jet. Also keep in mind that some European airports may ban hush kit-equipped airplanes.
The fractional-ownership craze has opened up a new option that shouldn’t be ignored by buyers of business aircraft. A concern of those looking into shared ownership is the "use it or lose it" blocks of time that are bought. If company travel is slow, you could lose thousands of dollars in unused hours. Conversely, you could underbudget aircraft usage and have to purchase more hours.
On the upside of fractionals is the ability to have a nearly new airplane that’s always available. The fractional ownership company takes care of all of the logistics, such as maintenance, pilot scheduling, and catering, negating the need for your company to set up a flight department. It is also a very predictable budget, which appeals to companies wary of unexpected high-dollar repairs or upgrades such as those the aforementioned Citation VI chief pilot faces.
If fractional ownership has been ruled out, the own-or-lease question then needs to be answered. If utilization is kept high and maintenance events are planned so as not to interfere with scheduling, straight ownership can be quite economical. Of course, depreciation becomes a big factor as the airplane ages, but that depreciation can be partially recouped in tax write-offs. Leasing allows you to obtain a new airplane for a set amount of time. Since airplanes don’t depreciate as much as automobiles, you may find decent lease rates, says Conklin & deDecker’s Aircraft Acquisition Planning.
All of these decisions are completely dependent on the needs of the company. As an owner or chief pilot, you know what you or your company’s typical mission is. You know what the typical load is, where the majority of trips go, and whether or not there is a priority placed on speed vs. comfort.
You can either prepare a report yourself or rely on the cost-evaluation companies to provide the detailed analysis for you. If nothing else, the evaluation companies provide a third-party voice from a recognized source to replace or supplement your thoughts on the subject.
For more information, contact Aviation Research Group/U.S., 8170 Corporate Park Drive, Suite 210, Cincinnati, Ohio 45242; telephone 513/247-1010; or visit the Web site ( www.aviationresearch.com); Conklin & deDecker, 62B Cranberry Highway Route 6A, Orleans, Massachusetts 02653; telephone 508/255-5975. Conklin & deDecker reports are available through the Aircraft Shopper Online site ( www.aso.com). Links to Web sites that can aid in purchase planning can be found on AOPA Online ( www.aopa.org/pilot/links/links0004.shtml). E-mail the author at email@example.com.
Aircraft Power and Fuel,
As the cold weather chills AOPA’s Headquarters in Frederick, many of us are inside generating new resources for flying clubs.
In my house, every Friday night is “Movie Night.” While the movies are rarely educational (I don’t think I learned anything from the Lego Movie), we look forward to the weekly opportunity to spend time together. Why not use the same concept for your Flying Club (with the addition of education, of course)?
The Aircraft Spotlight feature looks at an airplane type and evaluates it across six areas of particular interest to flying clubs and their members: Operating Cost, Maintenance, Insurability, Training, Cross-Country, and Fun Factor.
VOLUNTEER AT AN AOPA FLY-IN NEAR YOU!
SHARE YOUR PASSION. VOLUNTEER AT AN AOPA FLY-IN. CLICK TO LEARN MORE >>>
VOLUNTEER LOCALLY AT AOPA FLY-IN! CLICK TO LEARN MORE >>>
BE A PART OF THE FLY-IN VOLUNTEER CREW! CLICK TO LEARN MORE >>>