Buyer’s Guide August 2006


AUGUST 1, 2006

Picture courtesy of Paul Bowen


Does the speed of the Citation X really make a material difference?  Yes!

The Citation X was first delivered in the end of 1996 and quickly became NetJet’s best selling aircraft. This is true due to the combination of cabin comfort, speed, ease or maintenance, operating economics and dispatch reliability.

Initially with any technologically advanced aircraft, there were some issues that had to be addressed and overcome.   However, since the initial series of issues have been resolved and with an upgrade to the gross weight in 2002, the Citation X has become one of the most successful new aircraft introductions in recent aviation history.

Winner of the prestigious Collier Trophy for advancing aviation, the Citation X is a leading alternative to any mid-sized, super mid-sized or large cabin buyer.  For the midsized buyer, the Citation X offers a sizable cabin and baggage combination.  The double club configuration offers 8 comfortable captains chairs with a galley and good sized lavatory.  The baggage compartment is 72 cubic feet, pressurized and heated.  The range is as good as or better than any other competitor in its class.

For the super mid-sized or large cabin buyer, the Citation X offers unmatched speed and competitive operating economics.  The Citation X has set many speed records with its .92 mach top speed.  Though the speed and technological advancements get the “accolades”, Cessna is just as likely to sell an aircraft because of their product support.  When you speak with operators, especially the early serial number operators, they consistently applaud Cessna for the responsiveness.  When a Citation X beats out a competitor with a larger cabin, the “X” factor is usually the intangibles such as the smaller ramp presence, customer support, speed, and dispatch reliability.

Does the speed of the Citation X really make a material difference?  Yes

When compared with the F2000, the Citation X’s long range cruise is 60 miles per hour faster which translates into a cross country savings of 30-40 minutes.  Though the Citation X burns more fuel per hour, the specific fuel for the trip will be similar due to the time savings.  If you complete this trip on a regular basis, you could reduce your annual private jet utilization by 50 -100 hours per year.  Savings over other comparable aircraft like the Hawker 800XP or Gulfstream 200 would be even greater.

In the most important category, safety, the Citation X has one of the best records in all of business aviation.  According to Robert Breiling Associates Inc 2004 Annual Turbine Aircraft Accident Review, the world wide Citation X fleet had never been in an accident.  This is a credit to the aircraft’s design, the pilots who fly the Citation X, and the training and support available.

For more information on the Citation X or any other private jet, please contact Kevin O’Leary at

Picture courtesy of Paul Bowen


Beware of the fractional jet proposals laden with incentives

Fractional jet ownership (FJO) with the right manager is a pleasant experience.   The service from the major providers is excellent, safe and the customers are very satisfied with their decision to fly in FJO.

The operational costs to run a fractional ownership program are very similar and none of the major fractional jet managers have a distinct cost advantage over the others.   So, if the cost to administer an FJO program are very similar, and three out of the four proposals had little or no incentives to offer, but one manager offered incredible incentives … beware of the redemption process.

The redemption process defined in the contracts seems like a fair and objective process, and with the majority of vendors … it is!   There is language about the average of three appraisers and so on.   Most vendors work hard to maintain the fairness of the redemption process with one glaring exception, one fractional manager whose customers are presented with residual values far below the competition.   During our research we discovered two owners from separate FJO companies redeeming very similar aircraft during the same month and one fractional jet manager was offering $1,000,000 less for virtually an identical aircraft.

This astronomical difference in fair market value denotes a different business model all together.   We believe this company uses the redemption process to make up for operational loses.   These loses were created in part from offering too many incentives to coax prospects to become new owners.

Everyone loves to negotiate the best deal … but in a case where there is no distinct operational cost advantages or large margins to compensate for the incentives … then the owner has to pay for those incentives somewhere and that somewhere is the redemption of their share.

Remember if one vendor has proposed a “much better” deal … Caveat Emptor!

Am I paying too much in fuel surcharges?

Have you ever wondered if the fuel surcharges on your private jet invoices for your fractional jet share were accurate?  It is difficult to know what the fuel cost is every month and this can be a time consuming endeavor to verify all the data on your invoices each month.

Jet Advisors’ research has revealed errors on invoices for fuel surcharges. One audit revealed an error of $225 in fuel surcharges on one trip based on an inaccurate fuel adjustment factor.

The truth is the fractional jet service providers are generally charging fractional jet owners according to their contracts but at least one of the fractional jet service providers is exploiting the fuel surcharge as a profit center as opposed to protecting the profit margins.   Multiple fractional jet service providers are charging clients based on “their” cost of fuel which sounds fair but it is a nebulous number and nearly impossible to confirm.   Others charge based on the national average of fuel but it is obvious that they do not pay that rate at the pump.

How do you protect yourself?   Survey the different operators before signing the documents.   Have them quote their fuel surcharges for the posted rate of fuel is at $2.00, $3.00, $4.00 & hopefully not $5.00 a gallon.   This will give you a written record so that when fuel reaches that level you can check against what they assured you when you bought your fractional jet share.   If they base their rates on the national average, this will serve as a contract extension but if they use their “cost” of fuel, then this can only be used as a guideline to understand if they are buying fuel at a lower discount than they had at your time of purchase.   There could be legitimate reasons for the rise in their cost of jet fuel, however, this would be counter intuitive if their buying power increased during that time.

Ultimately there has to be some trust between you and your fractional jet operator about the mechanics of their fuel surcharges.   Remember, these operators continue to have some of the best safety records in aviation.    With the best intentions, all companies will make some errors in reporting and those errors can cost you, the private jet flyer, thousands of dollars.   There are companies who audit invoices like Jet Advisors and can insure against accounting errors, flight time variations and contractual accuracy.

Citation X 1/8th fractional jet share discounted over $500,000.

We are announcing a Citation X 1/8th Share for sale .the fastest business jet in the world. This share will cost you almost $1,000,000 less than a new Citation X share plus you will save $500,000 in overall costs! Act soon this will not last!

Picture courtesy of Paul Bowen


Aircraft Manager: NetJets
Purchase Price: $1,350,000
Monthly Management Fees: $20,943.00
Variable Hourly Rate (100 yr): $  2,673.00
Fuel Surcharge: $  1,341.60

Call me for additional information at 303 410-1900 x1 or 816-509-2545 or email me at

We are searching for a Challenger 601-3A E/R:     Low Miles, no damage history.

Picture courtesy of Paul Bowen


Jet Advisors has been retained to source a Challenger for our retail client. If you are considering selling your aircraft or know of an aircraft that may become available, please forward this information to us.