Status Jet News

Posted on April 1, 2015

Cost to Own & Operate CJ3

Cost to Own & Operate CJ3

The Citation CJ3, also known by its model number 525B, was first delivered in 2004 and was the third model in the line up of the popular CitationJet, abbreviated to CJ series. This article walks through the specifications and the various costs of ownership for the CJ3, including a scenario that includes charter revenue.

The CJ3 was relatively unchanged until 2014 when it was certified with the Garmin G3000 avionics suite, LED lighting, an upgraded interior, and renamed the CJ3+. Prior to that, the CJ3 was equipped with the Proline 21 Rockwell Collins avionics suite. For those new to aviation the avionics suite is the display and computers that interface with all of the aircraft systems. It provides the pilot with the necessary information required to pilot and navigate the aircraft.

charter a Citation CJ3 plus-570

The CJ3 is powered by two Williams International FJ-44-3A turbofan power plants that produce 2820lbs of thrust each, and it can seat up to 9 passengers depending on how the interior is configured. The aircraft has two separate baggage compartments, easily accommodating several golf bags and plenty of baggage. This is a benefit over some of its competitors, as they would need to place the larger items, such as the golf clubs, in the cabin aisle between the seats or in the aft seats of the cabin.

The Status Jet Citation CJ3-570

The aircraft has a respectable range between 1,700nm and 1,800nm with two pilots and two passengers and their baggage, making it a great aircraft for regional travel and the occasional coast to coast trip. As depicted in the range map (below), from Dallas the aircraft can make most locations on both East and West Coasts without making a fuel stop.

Status Jet Citation CJ3-Range-Map

One great aspect of the CJ series is that they are certified for single pilot operations, which allows added flexibility for the owner operator that will pilot the aircraft themselves. Those who fly the Cessna CJ3 single pilot, say that the Proline 21 cockpit can be a handful in a busy airport environment, while others find it easily manageable. For those who will operate the aircraft with professional pilots, the three screen Proline 21 avionics make cockpit resource management highly efficient. With the CJ3+, an upgrade to the Garmin G3000 avionics makes single pilot operations more convenient for the pilot (see image below), due to the simplicity of the user interface and the touch screens.

Status Jet Citation cj3plus-panel-570

Ultimately your budget, on top of other factors, will determine whether or not you buy a new CJ3+ or if you will buy a pre-owned CJ3. A new CJ3+ will cost slightly over $8 million when typically equipped, while a pre-owned CJ3 ranges from $4 million to $7.9 million. There are many factors to consider in the acquisition of a pre-owned CJ3, especially since some of the fleet is now reaching the 10 year old mark. Some of these factors are:

  • Engine TBO (Time Before Overhaul)
  • Are the engines enrolled in the TAP (Total Assurance Program) Advantage Program?
  • Damage/corrosion repairs
  • Paint condition
  • Interior condition
  • Airworthiness Directive and Service Bulletin compliance
  • Applicability of Avionics

We receive many questions regarding the ownership structure for the CJ3 and the benefits of this jet over others. This is not an easy question to answer as there are many factors to consider in the ownership of an aircraft, and that determine the proper structure for your situation. To provide some ideas on the estimated expenses, we will assume that the aircraft is owned by an individual and is managed by a professional aircraft management company.

So let’s examine the costs of ownership. We will review two scenarios;

  1. Private and/or Corporate Owned and Operated (Part 91)
  2. Private and/or Corporate Owned and Management Company Operated on a Charter Certificate (Part 135). Commonly used to offset some of the ownership expense or for tax advantages.

For each scenario, we’ve assumed the acquisition price is $4,718,000 with a 20% down payment made at time of purchase.

 

 200 Owner Hours 200 Owner / 200 Charter Hours
 PAYMENT SCHEDULE
 Interest Rate4% Interest Rate4%
 Payment PeriodMonthly Payment PeriodMonthly
 Term of Loan (Months)120 Term of Loan (Months)120
 Loan$3,774,400 Loan$3,774,400
 Payment Per Period$38,214 Payment Per Period$38,214
 Principal Amount$25,547 Principal Amount$25,547
 Interest Amount$12,666 Interest Amount$12,666
 GENERAL PARAMETERS
 Annual Owner Hours200 Annual Owner Hours200
 Annual Charter Hours200
 Fuel Cost Per Gallon$5.80 Fuel Cost Per Gallon$5.80
 Charter Rate$2,700
 ANNUAL VARIABLE COSTS
 Fuel Cost$179,800 Fuel Cost$179,800
 Airframe Maintenance$39,640 Airframe Maintenance$39,640
 Engine / APU Maintenance$53,554 Engine / APU Maintenance$53,554
 Crew Miscellaneous$30,800 Crew Miscellaneous$30,800
 Total Variable Cost$303,794 Total Variable Cost$303,794
 ANNUAL FIXED COSTS
 Crew Expense$148,200 Crew Expense$148,200
 Crew Training$27,690 Crew Training$27,690
 Hangar$35,978 Hangar$35,978
 Insurance$20,346 Insurance$20,346
 Aircraft Misc.$10,000 Aircraft Misc.$10,000
 Management / Marketing Fee$0 Management / Marketing Fee$2,000
 Payment / Capital Cost$458,568 Payment / Capital Cost$458,568
 Avge Market Depreciaton /Year$36,997 Avge Market Depreciaton /Year$36,997
 Total Cost W/O Charter$737,778 Total Cost W/O Charter$739,778
 CHARTER CONTRIBUTION
 Charter Revenue$0 Charter Revenue$540,000
 Variable Cost of Charter$0 Variable Cost of Charter$272,994
 Net Profit Contribution$0 Net Profit Contribution$267,006
 Total Fixed Cost With Charter$0 Total Fixed Cost With Charter$472,772
 ANNUAL BUDGET
 Annual Hours200 Annual Hours200
 Annual Budget W/O Charter$1,041,572 Annual Budget W/O Charter$1,043,572
 Annual Budget With Charter$776,566
 MONTHLY BUDGET
 Monthly Budget W/O Charter$86,798 Monthly Budget W/O Charter$86,964
 Monthly Budget With Charter$64,714
 HOURLY COSTS
 Owner Hrly Rate W/O Charter$5,208 Owner Hrly Rate W/O Charter$5,218
 Owner Hrly Rate With Charter$3,883

 

The above figures are provided by Aircraft Cost Calculator.

The variable costs of charter are made up of an hourly maintenance cost of $465.97 and hourly fuel cost of $899.00 to give a total hourly cost of $1,364.97. This is then multiplies by the 200 hours of charter to give $272,994.

April 1, 2015 / coders