In July, Gulfstream Aerospace wrapped up production of its ultra-long range Gulfstream G550, after nearly two decades and 631 aircraft.
Certified in 2003 for a maximum of 19 passengers—although typically configured for 13-15--the G550 was a derivative of the Gulfstream GV—certified in 1997, with 193 built by the time it ceased production in 2002. The aircraft is “an enhancement” of the GV, says Scott Neal, Gulfstream senior vice president G550 worldwide sales. For example, the G550 offers a 250-nm range increase over the GV’s, for a total of 6,750 nm maximum range—predicated on a maximum takeoff weight of 91,000 lbs. on a standard day, at Mach 0.80, with eight passengers; and NBAA IFR reserves.
Then, there’s the Honeywell PlaneView flightdeck, which, according to Honeywell, was a custom development of its EPIC avionics architecture--specifically for, and in conjunction with Gulfstream. Honeywell refers to it as a “generational change” from the SPz-8500 equipped GV cockpit. PlaneView introduced cursor-controlled graphical display interfaces for most major functions. The system uses four large format LCD displays in a landscape orientation, as opposed to the SPz-8500’s six displays in a portrait orientation. PlaneView also introduced a cabinet based architecture with removable and replaceable modules in place of a more federated system with stand-alone LRUs.
Power for the G550 is two Rolls-Royce BR710 C4-11 each rated at 15,385 lbs. of thrust, slightly higher than the Rolls-Royce BR710 A1-10 engines on the GV, with 14,750 lbs. of thrust, each. According to Rolls-Royce, it is not unusual for the BR710 to remain on wing for as long as 9,000 hrs. or longer, prior to a shop visit.
“Customers wanted more range to more destinations nonstop--especially between the United States and Asia,” says Neal. “They also appreciated the additional cabin space, created by moving the main door forward, and the latest safety technologies of the PlaneView flightdeck featuring Gulfstream’s Enhanced Flight Vision System.”
The G550s technology enhancements were among the factors that prompted one business executive, with growing travel requirements between the U.S. and Europe, to purchase a 2008 model last year, according to Doug Wattoff, an independent aviation consultant who worked with the buyer during the selection process.
“Initially, my client was very interested in the Gulfstream V, but realized that the G550 was the best long-term option, especially for serviceability, avionics and system upgrades, which are substantial over the GV,” says Wattoff. “At the same time, the, operating costs of the G550 and GV are very similar.”
Gulfstream’s Neal reports that there is a very high level of demand for the G550. He points out that (as of Aug. 3, 2021) there were less than 20 on the pre-owned market for sale. It is not hard to understand why small numbers of the popular jet tend to be available for sale, post-production, at any one time.
According to Adam Guthorn, Alton Aviation Consultancy’s managing director, the G550 occupies the long range segment of the market, which makes it ideal for international, nonstop transoceanic travel. “The closest replacement options in this market are the Falcon 7X/8X, Bombardier Global 6000/6500 and Gulfstream’s G600,” he says.
Asked why he believes that Gulfstream ceased production of such a hot selling airplane, Guthorn points out that the OEM has continued to focus on ever longer range and increased speed at the high end of the business jet market. “This includes shifting production to its other large jet product offerings including the newest G650ER, as well as next-generation G500 and G600 aircraft that can reach Mach 0.90 high speed cruise,” he reports.
According to data provided by Alton Aviation Consultancy, during the first half of 2021, an average of 33 G550s were for sale--equivalent to 5.5% of the 600 in service. The average age of the fleet was 11 years. For an 11-12-year-old G550, the asking price averaged $16-17 million, with time on the market ranging from 210-250 days. In contrast, in 2020, the last year the aircraft was commercially available, the list price for a new G550 was $54.4 million.
Anthony Kioussis, president and CEO of Asset Insight, reports that the G550 has held its resale value well, due to its cabin size, range, other operational characteristics and overall operating costs. “At the present time, these aircraft are transacting at or near their ask price, assuming there are no issues with respect to the aircraft’s specification and/or maintenance status, and the aircraft has no history of damage,” he explains.
Citing JETNET numbers, as of end of June 2021, Kioussis reports that 32 G550s were for sale, for an average ask price of $17,242,500. That figure encompasses an asking price range of $8,495,000-35,800,000, with an average of 226 days on the market. Between the third quarter 2020 and the end of the second quarter 2021, there were 68 preowned G550 retail sales. Those sales figures are what JETNET terms “whole aircraft,” as opposed to fractional transactions.
Kioussis says that the G550 also does well, based on its “maintenance exposure to ask price” Ratio (ETP Ratio). “The ETP Ratio, which is a very useful tool in determining an aircraft’s marketability, is calculated by dividing an aircraft's maintenance exposure by its ask price,” he explains. “Maintenance exposure is the financial liability accrued at any given time with respect to future scheduled maintenance events.”
Kioussis adds that a “days on market” analysis of inventory aircraft has shown that when the ETP Ratio of a listed aircraft is greater than 40%, its days on the market increase by more than 30%. To illustrate, during the second quarter of 2021, aircraft with a 40% or greater ETP Ratio were listed for sale nearly 89% longer than assets with an ETP Ratio below 40%, he says. That was 281 days for those below 40%, versus 530 days above.
“The ETP Ratio for the average G550 listed for sale as of June 30, 2021, was 30.7%,” says Kioussis. “At the same time, the ETP Ratio for large jets stood at 61.1%, while the average figure for our tracked, listed fleet comprised of 134 models was 73.5%.”
Also, the average G550 listed for sale posted a Maintenance Quality Rating of 6.273, compared to 5.573 for the average Large Jet listed for sale. A Maintenance Quality Rating of 5,500 or greater is “outstanding,” which contributes to the G550’s ability to retain its value.
Editor’s note: A second article will focus on the G550’s maintenance.
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