- 14 Feb 2020
- David Wyndham
- Operating Costs - BizAv
What Does it Cost to Operate a Medium Jet?
What does it cost to own and operate a business aircraft? Working through the different categories, David Wyndham outlines some of the common characteristics of each, and considers the scale of the associated costs…
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David Wyndham
David Wyndham has extensive expertise in aircraft sales and acquisitions, asset management, cost and...
This month, we examine the workhorse of the business jet fleet, the Medium Jet. There is no single industry definition for the various business jet categories.
For the purpose of this article, ‘Medium Jet’ includes aircraft that typically seat between six to nine passengers, offer limited galley and storage space, and a modest lavatory that may have a seatbelt for use as an extra passenger seat.
Cabin height with (as is often the case in this category) a step-down aisle requires most adults to stoop while entering and exiting, and typically measures in the region of 68 inches. Meanwhile, range in this class varies. Nevertheless, with seats full, most Medium Jets have a non-stop range that comes between 1,800nm and 2,800nm. Flights in this category usually last two hours or less.
Aircraft typical of this category include the Hawker 800/900 series; Cessna Citation Excel/XLS; Cessna Citation model 600 series (from Citation III to Sovereign); Bombardier Learjet 45, 60, and 75; Astra/Gulfstream G150 series; Falcon 50; and Embraer Legacy 450/Praetor 500.
How Much Does it Cost to Buy a Medium Jet?
Acquisition costs for new models in the Medium Jet category run between $14m to $19m list price. Pre-owned prices for Medium Jets in the 5- to 10- year-old category run from $3.5m to $10m. It is also possible to find airworthy 30-year-old Medium Jets for under $1m.
According to data tracked and compiled by AMSTAT, in December 2019 there were 7,734 active Medium Jets, of which 751 were listed ‘for sale’ with an average pre-owned asking price under $4m.
Placing a pre-owned aircraft into service will most likely require extra money. A buyer may spend $500,000 or more on upgrades, paint, and moderate interior refurbishment. Major maintenance checks may also be due soon and will need to be budgeted for at the time of purchase.
Engine overhauls vary considerably across this category. If the engines are close to overhaul, and are not enrolled on a guaranteed hourly maintenance plan, then an additional $500,000 to $1m (or more) should be budgeted for each engine ahead of the overhaul.
What’s the Operating Cost of a Medium Jet?
The operating cost of a Medium Jet depends on the size and age of the aircraft. Below are some approximate averages from the Conklin & de Decker Report for guidance:
- Average variable cost per hour: $2,600
- Fuel*: $1,250
- Maintenance: $650
- Parts, Labor, Major Maintenance Reserves Engine Reserves: $700
(*Fuel cost will depend on fuel price per gallon and fuel burn)
What are the Data Costs for a Medium Jet?
Another variable cost to budget for is Wi-Fi (airborne internet). This cost will depend on the type of connection, speed, and amount of data used, and where you fly. Maintaining internet connectivity will require either an air-to-ground system in North America or a basic satellite-based system.
There are different installation and rate plan options designed to fit the needs of both the passengers and pilots. New installations for an airborne internet system begin at $200,000. Monthly rates based on data used and download speeds are in the region of $5,000–$10,000 per month for moderate use, depending on the plan and equipment.
What are the Fixed Costs of a Medium Jet?
Fixed costs are typically in the region of $800,000 per year and include the following:
- Salaries
- Training
- Hangar
- Insurance
- Refurbishment
Salaries & Training: The pay for two pilots ranges from $110,000 to $155,000 per pilot, depending on job duties and experience level. Pilots will need training at least annually which can run from $40,000 to $64,000 for two crew members. A third pilot is sometimes hired to help maintain the flight schedule. It is also wise to employ an aircraft maintenance engineer/technician.
A salary for that individual will be $80,000+ per year, and they will take care of much of the routine maintenance, handle maintenance planning and maintenance control.
Moreover, if the flying schedule is complex and involves frequent changes and multiple individuals who can authorize use of the aircraft, a flight scheduler is recommended as well as an administrative person. Their salaries usually come in the region of $60,000 per year.
In summary, with three pilots and one maintenance engineer, you can budget on annual salary cost, benefits, and training expenses exceeding $500,000.
Hangar: For hangar rental, you should plan on an annual fee between $35,000 and $60,000 within a typical metropolitan area. Higher cost areas, such as New York City, Hong Kong or Geneva, will be significantly higher.
Insurance: For a Medium Jet, insurance can range between $20,000 and $40,000 depending on the aircraft value and liability limits. If the aircraft spends a lot of time outside developed countries, those costs may increase substantially.
Refurbishment: Paint and interior refurbishment should also be considered. A new interior and paint job may last seven to nine years with excellent care. Depending on the quality/level of completion, materials and extra features, you should budget $500,000–$750,000 for this work.
What’s the Overall Cost of Owning a Medium Jet?
Additional costs that can be incurred will be acquiring aircraft technical publications for the flight crew and additional maintenance, office and travel expenses.
Ultimately, the operating budget for flying 400 hours annually in a medium-size business jet will be approximately $1.85m per year. This figure does not includes the costs of capital, taxes, and depreciation.
Did you find this article helpful? Check back next month when we’ll consider what it costs to operate a Light Jet…
- Read What Does it Cost to Operate a Large Cabin Jet?
- Read What Does it Cost to Operate an Ultra-Long-Range Jet?
- Read What Does it Cost to Operate a Light Jet?
- Find Jets for Sale
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David Wyndham
David Wyndham has extensive expertise in aircraft sales and acquisitions, asset management, cost and budget analysis and finance fundamentals. With several decades supporting aircraft owners and operators in making fully-informed decisions about their aircraft needs, his expertise spans from the flight department to the executive boardroom.
David is the founder of David Wyndham + Associates, and previously he was a Co-owner and President of Conklin & de Decker where he consulted with large corporations, individuals, and government agencies on their aircraft needs.
