Legacy Citations - Are They Worth Considering?
*Article originally posted in AvBuyer Magazine
Tips When Shopping the Older Citation Jet Market
With thousands flying around the world, Cessna Citation 500-series business jets have built a solid, reliable reputation in the industry over the past 40+ years. But do they represent good value in the pre-owned marketplace? Tom Lelyo explores…
If you're in the market for a pre-owned Light or Mid-Size Jet, the chances are that you've at least considered one of the legacy Cessna Citation 500-series models. Spanning decades of production, these include the Citation 500, 501, 525?, 550, 551, and 560 along with their respective iterations.
As with aircraft of all makes and models, there are pros and cons to weigh before taking ownership. The following article seeks to help you navigate through some of the bigger points you’ll need to consider, including depreciation, affordability, single pilot operations, and pilot and maintenance support.
It should also be noted that the same considerations should be given to all pre-owned private jets, whether Citations, Learjets, Hawkers, or other. Without further ado, let’s delve a little deeper…
Harnessing Full Depreciation Benefits
When it comes to buying an older private jet, its previous owners have already taken the biggest depreciation hit. It’s no different to the first person who drives a luxury car off the showroom forecourt.
Older Cessna Citation 500 series jets have already experienced significant market depreciation, meaning pre-owned buyers can enjoy the advantage of purchasing one at a fraction of their original cost. For example, while the initial price of a Cessna Citation 500 was $695k (equivalent to $5.5m in today’s money), you can now buy one for as little as $500k.
Tax depreciation further sweetens the deal. In the United States, you can currently write-off 80% of your purchase price. However, the depreciation drops to 60% from January 1, 2024, and disappears altogether in three years’ time.
Nevertheless, when shopping the low-cost market for older pre-owned Citations, bear in mind that their original avionics and cabin systems will offer nothing like the capability and functionality of modern-day systems. For example, some were built before in-flight connectivity developed into what it is today, or perhaps contain legacy avionics in the flight deck.
You will need to select carefully from the available options on the market, ensuring they have been upgraded to meet your needs, along with any upcoming equipage mandates. With a low market value, the last thing you need to do is spend more on upgrading the jet than you paid to acquire it. If the previous owner has borne the bulk of the cost required to bring the aircraft’s systems up to present-day functionality, so much the better!
Older Cessna Citations: Attractive Price?
If they’re equipped to meet your flying needs, older Citations offer an accessible entry point into the world of private jets without compromising on performance or style.
In 2023, you can expect to find a solid Citation 501 (ISP) available on the pre-owned market for around $500k. Other models in the Citation 500 line top out at just over $2m (for a Citation Ultra) with plenty of options available in between to suit every budget.
Compared to a brand-new Cessna CJ4 Gen2 which costs about $9m to buy, while the CJ4 Gen2 offers some additional range, speed, and greater fuel efficiency, it can be difficult to ignore the $7m lower cost of the older model.
If you have the need to fly up to 1,600nm, accessing any one of the 14,000 private airports throughout the United States carrying five to eight passengers and a single pilot, the $500k-$2m price of an older Cessna Citation model is appealing.
Navigating the Maintenance Maze
Again, you will need to be smart when selecting from the pool of available Citations. Make sure you understand when the next overhaul is due for any particular model, since the price of an overhaul per engine could easily exceed the purchase price of the aircraft.
Start by checking whether an individual aircraft is enrolled on an hourly engine maintenance program, and if so, how much money has already accrued towards the upcoming overhaul or inspection. Having done the math, if it makes financial sense to buy the jet and continue to pay into the program towards the overhaul when it comes due, be assured that there are plenty of qualified MRO shops who can undertake the work who specialize in older Citation models.
If an overhaul does not make financial sense there could be other options available, including exchanging the older engines for refurbished one with more time on them, enrolling them on an engine extension program, or (for Part 91 operators only) doing a hot section inspection on the engines in lieu of a full overhaul.
Again, you will need to do some solid calculations on what each option will cost, and whether it makes sense to proceed with the acquisition.
Maintenance programs are all the more important on older jets because more life-limited parts need swapping out, and as aircraft age they naturally require more intensive maintenance.
With that said, your maintenance costs can be more easily controlled with an older Citation model because the market for spare parts is robust. There are plenty of cost-efficient options available for maintaining your jet, and while you might not bring your vintage jet back to Textron for maintenance there is a solid base of experienced mechanics, some of whom specialize in legacy Citation models, helping ensure your older jet receives the love and care it deserves.
Single Pilot Advantage
One of the key advantages of the older Cessna Citation 500 series is their design for simplicity and ease of use, particularly when it comes to single-pilot operations. While the Citation 501 (ISP) and 551 (IISP) can be operated by a single pilot ‘out of the box’, the entire Citation 500 series can be flown by a single pilot with the SP Waiver.
Obtaining the SP Waiver requires a minimum of 1,000 hours of total flight time and 500 hours of turbine flying time.
You should factor that there are additional costs for the initial type rating and re-certification, and it's also crucial to consult with your insurance company beforehand, as some carriers may have specific restrictions for owners/operators who prefer to fly their Citation single-pilot.
Legacy Citation models also create a unique pilot community thanks to the fact this ‘family’ of jets share common type ratings. Pilots with a type rating in one model can often fly others through a process called ‘difference training’, meaning that if you buy a Citation 560, for example, the Captain of a Citation 550 is likely to also be familiar with your jet, and could take the reins of your operation with minimal effort.
In fact, the legacy Citation pilot pool is one of the largest contract pilot pools in the industry, precisely because of this shared type rating system.
Legacy Citation Due Diligence Tips
As a savvy jet buyer, you will know that the least expensive element of owning one is the purchase price. When it comes to older Citation jet models, some of which have been operational for more than 40 years, a thorough pre-buy inspection should be an absolute must, helping avoid unexpected, expensive surprises later. Here are a few things to keep in mind:
· Look for continuous and complete logbooks.
· Insist on a borescope inspection of the engines, verifying the engine maintenance status and the due dates of any major upcoming inspections or overhauls.
· If you plan on running an engine until it needs to be overhauled, double check the life limited parts have enough time on them to reach the next major scheduled event.
· Take a test flight – pressurization issues can blight these older jets, so make sure the one you’re buying is not affected.
Ultimately, if you take all the care to do your homework and due diligence, the legacy Cessna Citation 500 series jets are classics, exuding elegance and reliability, and are very well supported in terms of service and support from the industry.
If you buy a high-quality example, it will provide you with an exceptional flying experience without compromising style or performance. With a touch of vintage class and a dash of modern adventure, one of these flying machines could be the perfect low-cost companion for your high-flying dreams.
More information from www.theultimatejetguide.com