Over the following paragraphs we’ll consider key productivity parameters for the Gulfstream G500 and Bombardier Global 5500 (including payload, range, speed, and cabin size) to establish which aircraft provides the better value in the Large Jet market.
Does speed drive a decision to buy a jet, or longer range? It is hoped that the following Large Jet comparison will help clarify.
Gulfstream G500
The Gulfstream G500 is a fairly new jet on the market, having entered service in 2018, replacing the Gulfstream G450. Powered by a pair of Pratt & Whitney PW814GA engines, each producing 15,144 pounds of thrust (lbst), the G500 can reach a maximum altitude of 51,000 feet – and, according to Gulfstream, can travel at up to Mach 0.925.
The Gulfstream G500's advanced ventilation system can replace the air in the cabin with fresh air in just two minutes, while in the cockpit the jet is equipped with active side-stick control technology.
As of this writing, since deliveries began there were 51 wholly-owned G500 business jets in operation worldwide, with 73% of the Gulfstream fleet based in the US.
Bombardier Global 5500
The 5500 from Bombardier Global is even newer to the market, having received FAA certification in December 2019. The newly certificated Rolls-Royce Pearl-15 engines each provide 15,125lbst, and impressively low fuel burn. Like the G500, the Global 5500 can reach a maximum altitude of 51,000 feet.
The cockpit is equipped with Collins Aerospace’s ProLine Fusion-based Vision Flight Deck, which has the new feature of Combined Vision System (CVS), and overlays an infrared video image on a synthetic graphic.
With the Global 5500 still being very new on the market, at the time of writing there were only two wholly-owned Bombardier Global 5500 business jets in operation.
Payload & Range Comparison
When comparing business jets, an important area for potential operators to focus on is payload capability, and especially the ‘Available Payload with Maximum Fuel’. Table A shows the Bombardier Global 5500’s ‘Available Payload with Maximum Fuel’ to be 2,930lbs, which is only slightly more than the 2,900lbs offered by the Gulfstream G500.
TABLE A: Gulfstream G500 vs Bombardier Global 5500 Payload Comparison
Cabin Comparison
As shown in Chart A, the cabin width of the Bombardier Global 5500 is 7.9ft, which is slightly wider than the Gulfstream G500 (7.6ft). Both aircraft offer the same cabin height (6.2ft).
CHART A: Gulfstream G500 vs Bombardier Global 5500 Cabin Comparison
The Gulfstream G500 has a longer cabin than the Bombardier Global 5500 (41.5ft vs 40.7ft) and provides more overall cabin volume (1,715cu.ft versus 1,620cu.ft). These cabin volume measurements are the net main seating area, and do not factor in the lavatory.
Configured with executive seating, the Gulfstream G500 and Bombardier Global 5500 typically provide room for thirteen seats with two crew (the G500) and three crew (Global 5500). The Global 5500 provides more internal luggage volume (195cu.ft) than the Gulfstream G500 (175cu.ft), and neither jet offers external luggage space.
Range Comparison
Using Wichita, Kansas, as the start point, Chart B shows the Gulfstream G500 has a range of 5,292nm with four passengers and available fuel, which is less than the Global 5500 at 5,978nm.
CHART B: Gulfstream G500 vs Bombardier Global 5500 Range Comparison
Note: For business jets, ‘Four Pax Range’ represents the maximum IFR range of the aircraft at long range cruise. The NBAA IFR fuel reserve calculation is for a 200nm alternate. This range does not include winds aloft or any other weather-related obstacles.
Powerplant Details
As mentioned, the Gulfstream G500 has two Pratt & Whitney PW814GA engines, providing 15,144lbst each. These burn 363 gallons of fuel/hour (gal/hr).
The Bombardier Global 5500 has two Rolls-Royce Pearl 15 engines producing 15,125lbst each. These burn 395gal/hr of fuel.
Cost per Mile Comparison
Chart C details ‘Cost per Mile’, comparing the Gulfstream G500 and the Bombardier Global 5500 factoring direct costs and with each aircraft flying a 1,000nm mission with an 800lbs (four passengers) payload.
CHART C: Gulfstream G500 vs Bombardier Global 5500 Hourly Cost Comparison
The Gulfstream G500 has the lowest cost per mile at $10.72 per nautical mile, which is 6% less expensive to operate than the Bombardier Global 5500 ($11.41 per nautical mile).
Variable Cost Comparison
The ‘Variable Cost’, illustrated in Chart D is defined as the estimated cost of fuel expense, maintenance labor expense, scheduled parts expense, and miscellaneous trip expense (e.g. hangar, crew and catering).
CHART D: Gulfstream G500 vs Bombardier Global 5500 Variable Cost Comparison
These costs DO NOT represent a direct source into every flight department and their trip support expenses. For comparative purposes, the costs presented are the relative differences, not the actual differences since these may vary from one flight department to another.
The Gulfstream G500 jet ($915/hr) has a higher variable cost than the Global 5500 ($773/hr). That’s a difference of $142 (18%).
Aircraft Comparison Table
Table B contains the new prices (per B&CA) for the Gulfstream G500 and the Bombardier Global 5500 ($48.5m and $46m, respectively). Also, listed are the long-range cruise speed and range numbers (per B&CA), while the number of aircraft in-operation, the percentage for sale, and average sold are from JETNET.
TABLE B: Gulfstream G500 vs Bombardier Global 5500 Market Comparison
At the time of writing, the Gulfstream G500 had three aircraft ‘for sale’ on the used aircraft market (representing 5.9% of the fleet). By comparison, there were no Global 5500 jets ‘for sale’. The average number of new and used transactions (units sold) per month over the previous 12 months was two for the Gulfstream G500.
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 can use accelerated 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: Business Aviation MACRS Tax Depreciation Schedule
In certain cases, aircraft may not qualify under the MACRS system and must be depreciated under the less favourable Alternative Depreciation System (ADS), 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 is 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 seven-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 any given year.
The US enacted the 2017 Tax Cuts & Jobs Act into law on December 22, 2017. Under the Act, taxpayers may be able to deduct up to 100% of the cost of a new or pre-owned aircraft purchased and placed in service before January 1, 2023.
This 100% 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% to depreciate qualified business jets until December 31, 2026.
Table D depicts an example of using the MACRS schedule for a 2020- model Gulfstream G500 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods. The price is as published by B&CA at the time of writing.
TABLE D: Gulfstream G500 MACRS Sample Tax Depreciation
Table E depicts an example of using the MACRS schedule for a 2020-edition Bombardier Global 5500 in private (Part 91) and charter (Part 135) operations over five- and seven-year periods. The price is per B&CA.
TABLE E: Bombardier Global 5500 MACRS Sample Tax Depreciation
Asking Prices & Quantity
At the time of writing, there were three Gulfstream G500 business jets available for sale on the used aircraft market, and only one had an asking price ($51m), while the other two invited offers. With just two Bombardier Global 5500s in operation, none were available on the used market.
While each aircraft serial number is unique, the Airframe Total Time (AFTT) and age/condition will cause great variation in the price of a specific aircraft – even between two aircraft from the same year of manufacture. The final negotiated price remains to be decided between the seller and buyer before the sale of an aircraft is completed.
Productivity Comparison
The points in Chart E are centered on the same aircraft. Pricing used in the vertical axis is as published in B&CA. The productivity index requires further discussion, since factors used can be somewhat arbitrary.
Productivity can be defined (and it is here) as the multiple of three factors:
- Four Passenger Range (nm) with available fuel;
- The long-range cruise speed flown to achieve that range;
- 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.
CHART E: Gulfstream G500 vs Bombardier Global 5500 Productivity Comparison
The Faster Speed Vs Longer Range Question
The Gulfstream G500 offers a faster speed but a shorter range than the Global 5500. The ‘Available Payload with Maximum Fuel’ is nominally lower than that of the Bombardier Global 5500, but the Gulfstream G500 cabin volume is greater.
The Bombardier Global 5500 is purchased at a lower price ($46m vs $48.5m) when new, and has an 18% more frugal hourly variable operating cost than the Gulfstream G500.
It is clear that would-be buyers of one of these Large Jets would have to weigh the capabilities of each very carefully against their specific mission need to determine which one is the best fit for their flight department. A further consideration will come into play once these jets build a track record in the pre-owned market and more becomes clear about how each depreciates with age.
Within these paragraphs we have touched upon several of the attributes that business jet operators value, although there are other qualities, such as airport performance, terminal area performance and time-to-climb that might factor in a buying decision.
Ultimately, there is plenty for a prospective buyer to consider when deciding which performance criteria is better suited to them in an aircraft. Both business jets offer great value in the market today.
