Even Better with Age

Even Better with Age

September 07th, 2016
By Glenn Watson

At Jet Quest, we pride ourselves in matching our clients with the perfect aircraft. That includes carefully researching all available options, new and pre-owned, to best suit each customer’s exact mission requirements.


As prices for pre-owned jets remain close to record low levels, the prospect of purchasing an older Citation jet over a newer aircraft becomes an even more appealing economic prospect. However, do the potential pitfalls of owning and maintaining an older aircraft offset the purchase price difference? To answer that question, we must first clarify what we mean by “older.”


Some older aircraft types – the Lear 20 series, for example, and Gulfstream GIIs and GIIIs – are simply not viable options in today’s environment as their powerplants are not able to meet modern noise and emissions standards. Avionics are another concern, as retrofitting newer systems that meet reduced vertical separation minima (RVSM) and automatic dependent surveillance-broadcast (ADS-B) standards would be cost-prohibitive, if not technologically infeasible.


That said, many older Citation jets are flying today in full compliance with current technological and regulatory requirements, thanks to the extensive array of upgrade options available. Consider, for example, the Citation 500 and 501. Despite being introduced in the late 1970s and early 1980s, these pioneering jets represent very attractive choices for the entry-level jet buyer, thanks in part to the aftermarket upgrades available for them.


In fact, there are several upgrade options for the oldest Citations. These range from performance and efficiency enhancements to the original Pratt & Whitney JT15 turbines, up to complete engine swaps with modern Williams International FJ44 turbofans – the same engines that power many brand new CJs. Wing extensions, additional fuel capacity, and avionics upgrades are some of the many options seen on aircraft currently on the market.


These aircraft are frequently equipped with readily-available equipment and avionics upgrades, able to comply with today’s regulatory mandates. It’s also becoming easier to find older jets equipped with such advanced systems as GPS-coupled autopilots, and even full glass panel cockpits rivalling the flight decks of the newest high-end business jets.


True, these retrofits aren’t inexpensive… That is, until you consider how accessible purchase prices for older aircraft can be. While actual list prices may vary significantly between specific aircraft, a Citation 501 with reasonable airframe and engine time, some upgrades, and no damage history may be found for list prices as low as $250,000 – leaving a lot of money on the table for additional upgrades, personalization options, and operating costs.


How significant is that cost advantage? Consider that the half-million dollars (or less) needed to buy a well-equipped older Citation is less than the interest on the note for a new, $6-7 million aircraft!


Similar price advantages are available throughout the Citation line. Early model CitationJets already equipped with several of the latest avionics upgrades can be had for less than $1 million; a 17-year-old Citation X, flagship of the Citation line, can be found for well under $5 million, a mere fraction of the pricetag for a new 2016 model.


In fact, we’ve had Jet Quest buyers who started out looking for a CJ who have discovered they could move up to a Citation X, simply because of the low investment costs!


Of course, purchase price is just one aspect of jet ownership; what about maintenance, fuel, and other operating expenses? While it’s true that older aircraft typically have higher operating costs than newer aircraft that are just out of warranty, low purchase prices still make these aircraft a much less expensive alternative to new planes.


When acquiring an aircraft for a client, we always look at the cost per flight hour over the ownership period. With some very capable, and still current technology jets now priced under a million dollars, and airplanes such as the Citation X priced in the $2.0-3.0 million range, the additional fuel burn and maintenance costs are offset by the interest on the purchase price.


Those numbers make purchasing an older aircraft an incredibly attractive proposition.