After 18 Years and 600-plus deliveries, it’s out of production but…
OPERATIONS
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.
BANYAN AIR SERVICE
“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.
WESTERN AIRCRAFT - BOISE, IDAHO
“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. Maintenance & Mods But this is not to say that all has been perfect. In 2018, Gulfstream issued Customer Bulletin CB 190—followed by a revised CB 190B in October 2019—mandating an inspection of the lower skin on the GV and G550 horizontal stabilizer, due to de-bonding and corrosion issues with the assembly that was supplied by Fokker. For the G550, the inspection specifically applied to those with serial numbers ranging between 5001 through 5158, with the exception of 5099, 5132, 5143 and 5156. According to Mark White, Gulfstream technical sales representative at Duncan Aviation in Provo, Utah, the inspection and repairs take at least four to six weeks, and they require the use of a tail dock assembly. Looking at coming MRO trends for the G550, White sees nothing above the mandatory 12-month airframe inspections. “Many owners are opting for new cabin management systems and connectivity system upgrades,” he says, adding that most of the interior work is coming from first-time G550 buyers. “That describes about 50% of our G550 customer refurbishment work.” Russell Crouch, Gulfstream service manager for Western Aircraft in Boise, Idaho, says that, other popular upgrades, especially for older G550 models, include new lighting systems and high-definition monitors, along with inflight entertainment.
As Gulfstream Aerospace closed out its G550 production run last year, Jorge Moll, founder and chairman of Rede D’Or, added one of the last ones built to his company’s fleet of corporate jets, which already included a 2010-completed G550 and an Embraer Phenom 300. Headquartered in Rio de Janiero, Rede D’Or is the largest independent hospital operator in South America, with over 50 hospitals. “We have been flying the G550 since early 2017, and when the decision was made in 2019 to add another large cabin aircraft to the fleet, the G550 was the obvious choice,” says Andre Lago, chief pilot of Yamandu, S.A., the company specifically established to operate Rede D’or’s two G550s. “From the owner’s point of view, it is a ‘time machine.’ From a chief pilot’s point of view, it is the Swiss army knife of business jets.” The G550’s reliability and performance on “ultra-long haul flights” was its major selling point, along with cabin comfort and direct operating costs as Lago explains. “We considered the Falcon 7X, but not enough range. The Global 6000, which we also looked at, had greater cabin volume than the G550, but its direct operating costs were higher. In terms of comfort, the G550 cabin is totally acceptable,” Lago notes. He adds that, on average, mission length for the their G550 is 5.4 hrs. per landing, with the longest legs between Rio de Janeiro and Moscow; and Christchurch, New Zealand to Rio de Janeiro. “Rio de Janeiro to Teterboro, and to Paris Le Bourget are our two most common G550 flights.” Lago thinks that Gulfstream is the only OEM, in his experience, which “delivers what it publishes,” mostly when it comes down to range numbers. Asked about customer support, Lago was somewhat reserved. “It really depends on where you are,” he says. “In the U.S. and Europe it’s fantastic. But I can’t overlook the fact that, although there are 40+ large cabin Gulfstream operators in Brazil, they shut down their service center in Sorocaba, Brazil back in 2018.”
However, “for out-of-production aircraft, finding specific parts for replacement becomes harder, and often the wait time to receive them is longer,” says Crouch. For now, that does not appear to be a problem. “There have been no significant supply chain issues for the G550,” stresses Paul Rose, vice president, technical sales at Banyan Air Service in Fort Lauderdale, Florida. “The G550 is an extremely reliable and dependable aircraft and nothing stands out to impact dispatch capability. In fact, NBAA has assigned the G550 a 99.9% dispatch reliability.” Rose points out that for earlier G550 models, there are several modifications that many operators consider. “They include upgrades to the cabin management switches; flight management system software upgrades; as well as improved connectivity, including Wi-Fi and high-speed data. “There are also two significant aircraft service changes (ASC) from Gulfstream for the G550--ASC 105C for ADS-B Out, and ASC 84D for enhanced navigation/FANS 1A/CPDLC,” says Rose. Jeff Mitchell, client aviation manager/maintenance supervisor for Solairus Aviation, a business aircraft management and charter firm in California, has had a G550, manufactured in 2008, under contract since 2014. “I have worked on other aircraft types, including the early Bombardier Global Express family, and in my experience, the G550 has had fewer maintenance issues,” he says. “In fact, we were very fortunate to have gotten through the horizontal stabilizer, lower skin inspections without any major problems.” Since the time the aircraft has been managed by Solairus, some modifications have been done, Mitchell reported. That included some upgrades to the PlaneView cockpit, offered by Honeywell, and installation of the Collins Venue cabin management system.
While Solairus has not experienced an AOG situation with the G550, Mitchell says that there were a few times when parts were needed right away. “I can tell you that Gulfstream was very responsive, getting the parts to us,” he says.
