Cessna Citation X vs Citation X+ vs Embraer Legacy 450

In this month’s Aircraft Comparative Analysis, Mike Chase provides information on a group of popular Mid-Size business jets for the purpose of valuing the Cessna Citation X and X+.

How do the Cessna Citation X and X+ compare in the jet sales market today? Over the following paragraphs, we’ll consider various productivity parameters (payload, range, speed and cabin size) and cover current market values. The field in this study also includes the Embraer Legacy 450.

Embraer Legacy 450

Several aircraft within the Citation family preceded the Citation X, but this model represented a clean sheet design when Cessna introduced it to the market in October 1990. A period of six years elapsed before the company could meet several specifications required to obtain certification.

Cessna Citation X

For more than 20 years, the Citation business jets were known as well-handling, but relatively slow aircraft. Thus, the Citation X broke the mould when it became the fastest corporate jet in the world, offering a top speed of 0.92 Mach with a maximum flight altitude of 51,000 feet.

Powered by two Rolls-Royce/Allison AE 3007C1 engines, the Citation X also features a 37-degree swept wing, a Honeywell Primus 2000 flight guidance system and a stand-up cabin.

Citation X production stopped in 2012 and the upgraded Citation X+ was introduced in 2013. The upgraded Cessna Citation X+ offers a longer cabin (accommodating two crew and eight to twelve passengers (nine is standard)), and improved range over the original Citation X.

Utilizing fully integrated Garmin G5000 digital avionics suite and new generation Rolls-Royce AE 3007C2 turbofan powerplants, it also offers a higher maximum cruise speed of 0.935 Mach. Citation X+ production continues today.

Worldwide Appeal

The total number of Citation X aircraft manufactured is 315, with 309 in operation around the world today. Of those, 276 are wholly-owned with seven in shared ownership and 26 in fractional ownership. There are 25 Citation X+ aircraft in operation, with one in shared ownership. Eleven percent of all Citation X and X+ jets are leased.

Of the Citation X and X+ aircraft in operation, by continent North America has the largest percentage at 89% followed by Europe (5%), accounting for a combined total of 94% of the world’s fleet.

Just over a quarter (28%) of the Citation X and Citation X+ jets in operation today are in fleet ownership. The largest fleet operator is US-based NetJets, which operates 25 Citation Xs.

As of December 2017, the Citation X market comprised of 25% new versus 75% pre-owned. By comparison, the Citation X+ was 88% new versus 12% used.

The percentage of Citation Xs ‘For Sale’ stood at 10.7% of the fleet, which take an average 359 days to sell. The percentage of Citation X+ jets ‘For Sale’ was 7.7%, with an average 179 days on the market.

Status of ADS-B Out Equipage

Of the 335 Citation X and Citation X+ jets operating worldwide, 150 (45%) have ADS-B Out installed, leaving 55% of the fleet yet to comply. The FAA has mandated that all business jets operating within US airspace 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. As depicted in Table A, the Citation X and Citation X+ ‘Available Payload with Maximum Fuel’ at 1,444lbs and 1,506lbs, respectively, are more than double that offered by the Embraer Legacy 450 at 611lbs, per Conklin & de Decker data.

TABLE A - Payload and Range Comparisons

Cabin Cross-Section Views

Chart A shows a cabin cross-section comparison with the Citation X/X+ offering less width (5.5ft) than the Embraer Legacy 450 (6.83ft). Also, the height of the Citation X/X+ (5.7ft) is less than the Embraer Legacy (6ft). The chart also depicts that the Embraer Legacy 450 offers a flat floor cabin design.

CHART A - Cabin Cross-Section Comparison

The Citation X+ cabin length is greater at 25.2ft compared to the Citation X (23.92ft) and the Embraer Legacy 450 (24ft). However, the cabin volume is greater for the Embraer Legacy 450 at 705 cubic feet than the Citation X+ at 593 cubic feet and the Citation X at 538 cubic feet.

Cessna Citation X+ Cabin View

Embraer Legacy 450 Cabin View

Range Comparison

As depicted by Chart B using Wichita, Kansas as the origin point, the Citation X+ (3,380nm) shows greater range coverage than the Citation X (3,125nm) and the Embraer Legacy 450 (2,963nm). 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.

Powerplant Details

As mentioned above, the Citation X is powered by two Rolls-Royce AE 3007C1 turbofan engines each with 6,764lbst. The Citation X+, meanwhile, utilizes a pair of Rolls-Royce AE 3007C2 powerplants with 7,034lbst. Finally, the Legacy 450 has two Honeywell HTF 7500E turbofan engines each with 6,540lbst.

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.

CHART C - Variable Hourly Cost Comparison

The Total Variable Cost for the Citation X and Citation X+ computes at $3,421 and $3,400 per hour, respectively, both of which are more by approximately 22% than the Embraer Legacy 450 at $2,798 per hour.

Aircraft Comparison Table

Table C contains the 2017 used prices, per Vref, for each aircraft. The average speeds are from Conklin & de Decker and the ranges are from B&CA. Meanwhile, the number of aircraft in-operation, percentage ‘For Sale’, and average sold are as reported by JETNET.

TABLE B - Jets Comparison Table

The Cessna Citation X has 11.3% of its fleet ‘For Sale’ (as of December 31, 2017); the Citation X+ has 8% ‘For Sale’; and the Embraer Legacy 450 currently shows no aircraft ‘For Sale’. The average number of used transactions (sold) per month shows five for the Citation X compared to 0.3 for the Citation X+ and 1.1 for the Legacy 450.

 Maximum Scheduled Maintenance Equity

Chart D displays the original Citation X model and depicts the Maximum Maintenance Equity 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. The percent of the Maximum Maintenance Equity that an average aircraft will have available based on its age assumes:

• Average annual utilization at 400 Flight Hours
• That all maintenance is completed when due.
  
  

CHART D - Maximum Scheduled Maintenance Equity (Citation X Only)

Depreciation Schedule

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 - Part 91 and Part 135 MACRS 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 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 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 percent of the cost of a new or used aircraft purchased after September 27, 2017 and placed in service before January 1, 2023.

This 100 percent 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 percent to depreciate qualified aircraft until December 31, 2026.

Table D depicts an example of using the MACRS schedule for a 2017 model Citation X+ in private (Part 91) and charter (Part 135) operations over five and seven-year periods, assuming a 2017 list price of $23m (per the Vref Pricing Guide).

TABLE D - Cessna Citation X MACRS Depreciation Schedule

Asking Prices & Quantity

The current used jet market for the Cessna Citation X aircraft shows a total of 33 aircraft ‘For Sale’ with 17 displaying an asking price ranging from $2.445m to $11.265m. We also reviewed the used Citation X+ (two for sale) with one listed at $17m.

There were no Embraer Legacy 450s ‘For Sale’ at the time of analysis. (According to Vref, a 10-year-old (2007) Citation X value has declined to 29% of its new retail price.)

While each serial number is unique, the Airframe (AFTT) hours and age/condition will cause great variations in a used jet’s value. Of course, the final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.

Productivity Comparisons

The points in Chart D 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. Four/Eight Passenger Range (nm) with available fuel;
2. The long range cruise speed flown to achieve that range;
3. The gross 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.

CHART D - Productivity Comparison

After consideration of the Price, Range, Speed and Cabin Size, we can conclude that the Citation X and Citation X+ display a high level of productivity.

The Citation X+ business jet is offered at a much higher new price compared to the Embraer Legacy 450. Indeed, the Embraer Legacy 450 offers greater cabin volume and lower variable operating costs than the Citation X and X+, but it also offers a little less range and much less ‘Available payload with Maximum Fuel’.

Operators should weigh up their mission requirements precisely when picking the option that is best for them.

Summary

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 Cessna Citation X and Cessna Citation X+ continue to be popular today. Those operators in the market should find the preceding comparison useful. Our expectations are that Citation X and X+ will continue to do well in the used markets for the foreseeable future. (Of course, if your Citation X and X+ jets are not outfitted with ADS-B Out, they cannot be placed in operation within US airspace after December 31, 2019.)