Plane Sense March_FinanceNov 19/02/2013 12:06 Page 4
NEXTANT HAWKER 400XT CONVERSION
conversion is nearly the same. That means the aggregate fuel consumption plummets about 35 to 40 percent with the rest of the gain coming from airframe improvements. Now consider a pre-powerplant-transplant jet that typically flies 350 hours per year, burning 160 gallons per hour, with fuel costing approximately $7.00 per gallon. The annual fuel budget would come in at $392,000. Imagine the same jet underwent an engine upgrade, and recalculate the cost at the new fuel burn-rate of 120 gallons per hour (a mere 25 percent reduction). Your new annual fuel tab would be $294,000: That’s $98,000 dollars less that you paid the previous year, before you had the engines upgraded. Longer hot-cycle inspection and overhaul cycles would naturally contribute to further cost reductions. The breaker is finding a program that fits your airplane, your needs, and your budget. But with overhauling an engine pair in the $900,000-$1 million range, and conversions within striking distance, the long-term, fulllife costs of the conversion may actually pay – particularly when compared to keeping older engines with their higher fuel use.
The flip side of greater fuel efficiency is the ability to tanker fuel when cabin demands allow for the carriage of more fuel than needed. Avoiding fuel stops saves money, since you’ll avoid paying more than you do at home, or at other specific FBOs. Every little bit helps.
PROGRAM PROSPECTS If you own a Falcon 20 you’ve got options; a Falcon 20 Retrofit with Honeywell engines. The same can be said for the Falcon 50; the 50Dash-4 program Honeywell supports (www.50dash4.com), along with its several approved installation sites. Cessna Citations can be upgraded with Williams engines, and likewise for older Beechjet options. There are plenty of older Citations and Beechjets yet to benefit from the upgrades developed by Sierra Industries. For example, the Sierra Stallion conversions of older Citations (www.sijet.com) remain available, as does the 400A conversion Sierra Industries developed for Beech. For fans of the once-plentiful Learjet 25, Spirit Wing Aviation developed its SpiritJet that converts to FJ44 engines from the original GE 610 turbofans.
NON-DIRECT SAVINGS A jet that uses significantly less fuel missionto-mission also offers greater flexibility in planning and executing trips. For example, by working a flight plan based on fuel needed (plus NBAA reserves), an operator of an upgraded airplane will naturally be dealing with smaller fuel loads – and, along with that, the ability to carry more in the cabin.
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WORLD AIRCRAFT SALES MAGAZINE – March 2013
TIMING IS EVERYTHING Whether you are looking at one of these programs or other, newer ones that are likely to arrive. Yet undertaking a ‘heart’ transplant is not a spur-of-the-moment project – not in Business Aviation, anyhow. Central to exercising the best option will be the research you undertook to find and qualify an option as www.AvBuyer.com
being suitable for your operation. Beyond that, timing and financing will rule the decision-making process. Timing-wise, conversion shops consistently recommend the operator plan on the conversion, retrofit or upgrade to coincide with other major projects, so if an upgrade can be worked out to match the overhaul cycle of the powerplants, so much the better. Timing to coincide with a long-term periodic airframe inspection is an equally good approach – particularly when it means skipping a second down-cycle by tackling the engine earlier than is absolutely necessary. There’s no sense in having the expense of two hangar stints if the objective can be accomplished in one visit – even if it means doing some work early. How will the cost of the upgrade be financed? The disciplined operators who diligently deposits funds into an overhaul equity account, won’t find the check-writing so painful. Timing to take best advantage of any special tax treatments is worth consideration. While it may mean moving ahead with the project a little earlier than engine health requires, it can also mean spending far less with the exercise of available tax breaks. Such benefits don’t last long. The option of an engine upgrade – or of broader programs covering avionics and more – can also be a solid reason for considering some used airframes. Given their low residual value, it just may be smarter financially to find an eligible airframe for a full treatment – giving your operations all the benefits of new, with fewer of the costs. You have the power! ■ Aircraft Index see Page 4