- 13 Jan 2020
- David Wyndham
- Operating Costs - BizAv
What Does it Cost to Operate an Ultra-Long-Range Jet?
David Wyndham continues his series with a look at the operating costs associated with owning and flying an Ultra-Long-Range business jet. How much do they cost to buy, and what other associated costs come with these aircraft?
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David Wyndham
David Wyndham has extensive expertise in aircraft sales and acquisitions, asset management, cost and...
What does it cost to own and operate a business aircraft? Working through the different categories, David Wyndham outlines some of the common characteristics and associated costs in Ultra-Long-Range Jet ownership…
There’s no single industry definition for the various business jet categories. Conklin & de Decker considers the cabin size and range. For an Ultra-Long-Range Jet, this means we’ll be discussing aircraft that typically seat 12 or more passengers, have a flat cabin floor, offer galley space for preparing one or more complete hot meals, and provide a generously equipped lavatory area.
Cabin height should allow for most people to stand straight (i.e., approximately 188cm), and range should allow for at least 5,000nm, non-stop. Aircraft falling within this category include:
- Bombardier Global Express XRS/6000/7500;
- Dassault Falcon 7X, 8X and future 6X;
- Gulfstream G550, G650 and G500 series;
- Airbus ACJ (with long-range fuel tanks); and
- Boeing BBJ (with long-range fuel tanks).
How Much Does it Cost to Buy an Ultra-Long-Range Jet?
Acquisition costs for new Ultra-Long-Range business jets run anywhere from $50m to $72m list price, while the (Airbus and Boeing) VIP airliners can exceed $100m+ for the largest variants featuring opulent interiors that include showers and staterooms.
Pre-owned prices vary significantly, given that many of these models have been in production for several years. For guidance, a first generation 15- to-20-year-old Ultra-Long-Range Jet can be purchased for $8-10m, while the more recent variants cost ~$40m.
Placing a pre-owned aircraft into service is likely to require additional funds. A buyer may elect to spend approximately $2m+ on upgrades, paint and moderate interior refurbishment.
Major maintenance checks may be due soon and must be budgeted for at the time of purchase. If the engines are close to overhaul and not on a guaranteed hourly maintenance plan, at least an additional $1m per engine should be budgeted for the overhaul.
What’s the Operating Cost of an Ultra-Long-Range Jet?
Operating costs for Ultra-Long-Range Jets depends on the aircraft’s size and age. Following are some approximate averages from the Conklin & de Decker Report to help provide some guidance:
- Average variable cost per hour: $4,800
- Fuel*: $2,400
- Maintenance: $1,400
- Parts, Labor, Major Maintenance Reserves & Engine Reserves: $1,000
*Fuel cost depends on fuel price per gallon and fuel burn.
What are the Data Costs of an Ultra-Long-Range Jet?
Another variable cost to budget for is Wi-Fi or airborne internet. Ultra-Long-Range Jets fly globally, so maintaining internet connectivity will require a 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 a satellite system can run anywhere from $650k to $800k.
Monthly rates based on data used and download speeds can start at $50k per month for moderate use. An approximate data estimate is $2k to download a movie in HD or $4k to stream a live sporting event.
What are the Fixed Costs of Ultra-Long-Range Jet Ownership?
Fixed costs of Ultra-Long-Range Jet ownership are typically in the region of $2.5m per year, and include:
- Salaries
- Training
- Hangar
- Insurance
- Refurbishment
1) Salaries: The pay for two pilots ranges from $200k to $300k per pilot, depending on job duties and level of experience. For Ultra-Long-Range Jets, a third pilot is often hired to maintain the flight schedule since, given the long range of these aircraft, flights may extend to 14-hours.
A trained flight attendant is also a pre-requisite with an average full-time salary in the region of $130k annually. It’s also wise to employ an aircraft maintenance engineer or maintenance technician at $80k+ per year to take care of much of the routine maintenance, handling maintenance planning and control.
And if the schedule is complex with 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 are usually in the region of $60k per year.
In summary, with three pilots, one flight attendant and one maintenance engineer, the annual cost for salaries, benefits and training will likely exceed $1.5m for Ultra-Long-Range Jet ownership.
2) Training: Pilots will need training at least annually, which can cost between $100k and $125k for two crewmembers.
3) Hangar: For hangar rental, Ultra-Long-Range Jet operators should plan on an annual fee between $100k and $120k (for a typical metropolitan area). High cost areas such as New York City, Hong Kong or Geneva, will be significantly higher.
4) Insurance: It can cost $60k to $80k annually to insure an Ultra-Long-Range Jet, depending on the aircraft’s value and liability limits. If the aircraft spends a lot of time outside of developed countries, those costs may increase substantially.
5) Refurbishment: Paint and interior refurbishment should also be considered. Depending on the level of completion, materials and extra features, you should budget approximately $2-3m for this work on your Ultra-Long-Range Jet. A new interior and paint job may last seven to nine years with excellent care.
Additional costs that can be incurred include acquiring aircraft technical publications for the flight crew and additional maintenance, office and travel expenses.
In Summary
The operating budget for 400 annual hours in an Ultra-Long-Range business jet will be approximately $5m per year, excluding the costs of capital, taxes and depreciation.
Next time we’ll consider the question of what it costs to operate a Medium Jet. Stay tuned…!
More information from www.conklindd.com
- Read What Does it Cost to Operate a Large Cabin Jet?
- Read What Does it Cost to Operate a Medium 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.
