Should I Buy New or Used Aircraft?

Today’s Business Aviation user is sophisticated enough to explore the spectrum of available new and used aircraft for sale.  David Wyndham launches a three-part series on factors to consider when choosing between the aircraft buyer options.

Business jets are certified to the same standards as commercial airliners, yet they typically operate a small fraction of the hours flown by the Scheduled Airlines. Airliners remain in service for decades and are commercially viable well beyond 50,000 flight hours. Thus it is understandable that a pre-owned business jet, properly maintained and updated with required avionics and safety features, is a plausible option when a company or entrepreneur is contemplating the multi-million dollar purchase of a business aircraft. Certainly the wise buyer looks at all possibilities open to them.

When evaluating a business aircraft, the best advice is to select equipment that fits your mission and can be acquired as well as operated within your budget. General wisdom also suggests that pre-owned aircraft cost more to operate, and new aircraft cost more to acquire. As always, there is more to the story. Over this series, we'll explore factors to consider when contemplating purchasing new, considerations when evaluating pre-owned, and address what the analysis should involve.

One caveat: Aircraft are not like automobiles. A 15-year old family sedan with 250,000 miles is probably at or near the end of its useful life. A new set of tires probably doubles the used sedan's value, so economically it makes little sense to spend much money on its roadworthiness. Aircraft, by their design and by the fact they are maintained to exacting tolerances, have useful lives well past 50 years. An aircraft's life is measured in flight-hours and cycles (or landings). The typical life span of an aircraft can be 50,000 or more flight hours.

Why Buy New Jets for Sale?

While the salesperson jokes nothing beats that new jet smell, there are many reasons why new is the way to go. New aircraft may be more capable than their predecessors. The Gulfstream G650 has a one-third larger cabin and greater range than the Gulfstream G550. It also provides an advanced cabin-pressurization system that makes those 14-hour long trips even more comfortable. If you need that G650 capability, the G550 business jet doesn’t suffice.

New aircraft also come with new technologies that make operating them less costly and potentially more versatile than models available a few years ago. Head-up guidance and synthetic vision can give the pilot the equivalent of a daytime view when landing in poor visibility (surely a safety advantage). Navigating in North America, Europe and across the oceans have evolving requirements for more accurate avionics equipment.

The US FAA "NextGen" navigation system requires new capabilities that come with new aircraft.

You also get to choose the options you need, along with interior layout, colors, fabrics and other appointments. While somebody may like the colors of that purple and green aircraft, you may not. This situation is also important if your aircraft needs to match the corporation’s colors or if you have several aircraft with a common livery.

Maintenance monitoring systems and computerized features available on today’s models make troubleshooting the new aircraft a matter of looking up an error code. Line replaceable units make swapping out some equipment as easy as swapping a hard drive on your desktop computer. Cabin connectivity such as high-speed internet as well as anti-noise and anti-vibration technologies have evolved with smart cabins. Today’s aircraft are rapidly becoming an extension of the home office.

Warranties

New jets for sale come with full warranties. While new equipment tends to be more reliable, it can be costly to replace. The warranty gives the owner peace of mind that if components fail prematurely, the repair or replacement is covered.

New aircraft have reduced maintenance costs. This fact is not just because of warranty and better technology, but also because of the manufacturer's continuing refinement of required maintenance schedules and reliability centered maintenance practices.

In order to maintain aircraft safety, as aircraft age they tend to require more intense inspections and preventative care, especially those that spend a lot of time operating in corrosive environments.

The lower required maintenance of new aircraft also means they can fly more.

Aircraft Availability is defined as a percentage of days an aircraft is available for flight in an operating year. (Aircraft Reliability is the percentage of times an aircraft can be dispatched when available for service. This number is higher, sometimes measurably, than Aircraft Availability.) Keeping an aircraft reliable (not to mention, safe) requires maintenance. When the aircraft is in for maintenance, it is not available for flight. If an aircraft is down for maintenance three weeks in a year, its availability is 94% (i.e., 49-weeks out of 52-weeks per year).

As aircraft age, unscheduled maintenance increases, and more maintenance usually is required to keep a high rate of reliability once the aircraft has been determined to be available. Obviously, time in the hangar or maintenance shop detracts from the aircraft’s availability for flight operations. Represented in Table A, data researched by Conklin & de Decker show that availability drops off as the aircraft ages.

For this reason a business aircraft operator should think carefully about keeping their aircraft beyond age 20.

Several of our clients replace their business jet aircraft within six years of purchasing new. With that policy, their aircraft are always in warranty and the aircraft's first time-intensive maintenance check occurs in year six. That practice easily provides for 600 to 700 hours of flight operations per year, per aircraft.

Next month we will address factors when considering pre-owned business jets for sale.

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