Cessna Citation CJ2+ Jets or Pilatus PC-12NGs Turboprops for Executive Jets

Introduction
This paper will recommend to the President of Executive Jets of Daytona and investors on the appropriate fleet mix and cost of recapitalizing the company’s fleet with a new Cessna Citation CJ2+s and Pilatus PC-12NGs. The new fleet combination should be able to serve the company’s customers, who are categorized as: those from large companies, those from medium-sized companies, and leisure travelers. Accordingly, the fleet combination should have a Cessna Citation CJ2+s to serve customers from large companies, who are always willing to save even modest time and those from medium-sized companies who prefer jets for long trips. It should also have a Pilatus PC-12NGs to serve leisure travelers, who are usually not willing to pay premium prices to save time and also have heavy baggage, and some of the passengers from medium-sized companies who are sensitive to cost and prefer this plane when traveling over short distances. This report will cover the market requirements, each aircraft’s market fit, operational concepts of each aircraft, and the acquisition and operating costs of each plane. Finally, it will recommend the best fleet combination.
Market Requirements
The customers served by the Executive Jets of Daytona are divided into three categories: those from big companies, those from medium-sized companies, and leisure travelers. Each group of customers has unique travel demands, which make the company to use both the Cessna Citation CJ2+s and the Pilatus PC-12NGs. Thirty percent of the Daytona are from big companies, fifty percent are from medium-sized organizations, and twenty percent are leisure travelers. Accordingly, Daytona must have a fleet that can serve the need of each market segment based on their incomes and travel needs.
The main distinction in each market segment is the desire to save time, willingness to pay a premium price, and the cabin size required due to the customer’s luggage. Passengers from big companies grossing between $51 and $90 million are always willing to pay premium amounts to save the even modest amount of time. As a result, the company must operate Cessna Citation CJ2+s aircrafts to serve them. Passengers from medium-sized companies, those grossing between $20 and $50 million per year, value comfort and time but are also sensitive to the cost of travel. Therefore, these customers will take Cessna Citation CJ2+s for long trips and Pilatus PC-12NGs when traveling over short distances. Finally, leisure travelers are usually not willing to pay premium prices to save time. Moreover, they always carry along heavy baggage, such as surfboards and scuba tanks, and thus prefer aircrafts with large cabins, even if they are slow. Therefore, Daytona must operate Pilatus PC-12NGs to serve these passengers.
The 50/30/20 spread of travel by the company’s passenger segments is sustained in each of the company’s mission segment. The passenger load for the company is of two classes: 1-3 passengers and 4-6 passengers. The company’s flights cover distances from 400 miles to 2200 miles. Noteworthy, both the Cessna Citation CJ2+s and Pilatus PC-12NGs fuel midway when traveling for distances of up to 2200 miles since their fuel ranges are of about 2000 miles. The Cessna Citation CJ2+s has a range of 2049 miles (3298 km), and Pilatus PC-12NGs is 2123 miles (3417 km). Also, passengers from medium-sized companies usually use Cessna Citation CJ2+s when traveling for a distance beyond 1200 miles, and they prefer Pilatus PC-12NGs when traveling for shorter distances unless they have urgent appointments. The market chart for Daytona is as shown in the table below.
 
 
Table 1
Market Chart of Daytona

Market Chart
Annual “Aircraft Days” Expended in Support of Missions Characterized by Passenger Loads and Distances
  401-600 miles 601-800 miles 800-1200 miles 1201-1800
Miles
1801-2200 miles
1-3 passengers 50 100 100 100 100
4-6 passengers 100 200 50 50 50

 
Aircraft Market Fit
Cessna Citation CJ2+s
The Cessna Citation CJ2+s is an executive jet with an ability to fly long distances at high speed (Cessna 3). The maximum cruise speed of the aircraft is 481 mph (774 km/hr) at the height of 31,000ft and above, and when having a mid-cruise weight (Cessna 8). The CJ2+s has two integral fuel tank, one on each wing, providing a total of 1796 kg (3,961 pounds) of usable fuel (Cessna 8). The average fuel consumption of the plane is 138 gallons per hour (522.38 liters per hour). The Cessna Citation CJ2+s has a range of 2049 miles (3298 km). The aircraft’s interior measures 57 inches tall, 58 inches wide, and 13 feet, 7 inches long (Cessna 8). It thus provides plenty of legroom for up to 8- passenger configuration. It also has two separate baggage areas that have a total volume of 65 cubic feet (1.84 m3) and a total weight capacity of 1,000 pounds (454 kg) (Cessna 8). Therefore, the aircraft provides an ideal environment for passengers who want to travel over long distances (up to 2000 miles) within a short time or those that are sensitive to their time. However, its small baggage carrying capacity makes it unsuitable for leisure travelers, since they always carry much heavy baggage).
Pilatus PC-12NGs
The Pilatus PC-12NGs is a suitable aircraft for leisure travelers and individuals who are not extremely sensitive about their time. The plane has a crew of one or two pilots and a passenger capacity of 6 to 9 seats. The payload of the plane, including full fuel and pilot on board, is 704kg for the cargo plane, 623 kg for the passenger plane, and 438 kg in the 6 seats executive plane (Pilatus 8). The cabin volume of the aircraft is 330ft3 (9.34m3). It has a cabin length of 16ft 11 inches, a width of 5ft, a height of 4ft 10 inch, and a width floor of 4ft 3 inch. The passenger door dimensions are 24* 53 inches, and the cargo door dimensions are 53 * 52 inches. The internal baggage volume is 40ft3 (1.13 m3). The cruise speed of the plane is 528km/h (328 mph). Pilatus PC-12NGs has a range of 2123 miles (3,417 km) and fuel consumption of 66 gals per hour (250 liters per hour) (Pilatus 8). Given the large cabin dimensions of the Pilatus PC-12NGs, which provide it with enough space for passengers carrying heavy and bulky baggage, the plane is suitable for leisure travelers. Since the aircraft can also be configured to have an executive interior, Dayton can configure its planes so that they can be able to carry both executive passengers from mid-sized companies and leisure travelers, who bring along have bulky cargo.
Operational Concept
The Executive Jets of Daytona will operate both the Cessna Citation CJ2+s and the Pilatus PC-12NGs aircrafts in all its trips. As highlighted earlier, passengers from large companies use the Cessna Citation CJ2+s in all their trips, those from medium-sized companies use both the Cessna Citation CJ2+s and the Pilatus PC-12NGs depending on their travel needs, and leisure travelers only use the Pilatus PC-12NGs. Noteworthy, passengers from medium-sized companies use Cessna Citation CJ2+s when traveling for a distance beyond 1200 miles, and they prefer Pilatus PC-12NGs when traveling shorter distances unless they have urgent appointments. The aircraft utilization for Executives Jets of Daytona is as shown in the table below.
Table 2
Aircraft Utilization of Daytona

Aircraft Utilization
Annual “Aircraft Days” Expended in Support of Missions Characterized by Passenger Loads and Distances
  401-600 miles
Total PC/CJ
601-800 miles Total PC/CJ 800-1200 miles Total PC/CJ 1201-1800
Miles Total PC/CJ
1801-2200 miles Total PC/CJ
1-3 passengers 50       23/27 100     45/55 100     45/55 100           20/80 100       20/80
4-6 passengers 100     45/55 200     90/110 50      23/27 50             10/40 50         10/40
All passengers 150    68/82 300    135/165 150    68/82 150           30/120 150      30/120
Monthly Demand (Approx.)            6/7              12/14            6/7                  3/10             3/10

 
From the table above, the Cessna Citation CJ+2s’ will make about 48 trips, and the Pilatus PC-12NGs will make 30 trips per month. The Cessna Citation CJ+2s has a maximum cruise speed of 481 mph. Therefore, it is practical to assume that the Daytona’s aircrafts will have an average cruise speed of 330 mph. We can also assume that each aircraft will require twenty minutes for landing and twenty minutes for take-off. Therefore, the average time that will be spent on each mission is shown in the table below.
Table 3
Average Time Spent on Each Mission by Cessna Citation CJ+2s

Aircraft Utilization
Annual “Aircraft Days” Expended in Support of Missions Characterized by Passenger Loads and Distances
  401-600 miles 601-800 miles 800-1200 miles 1201-1800 miles 1801-2200 miles
Flying time 109 min 145 218 327 400
Take-off and landing 40 40 40 80 80
Total time 149 (2hrs 29min) 185 (3hrs 5min) 258 (4hrs 18 min) 407 min (6hrs47 min) 480 min (8hrs)
Monthly Demand 7 14 7 10 10
Total Trip hrs. (Approx.) 17hrs 30 min 43hrs 30hrs 20min 67hrs 30 min 80hrs

 
The total number of hours that the Cessna Citation CJ+2s’ will fly each month are 238hrs and 20 min. (Approximately 238hrs). If we assume that Daytona will require its Cessna Citation CJ+2s to fly for only 8 hours per day, then a single plane can carry the company’s passengers for 30 days (238/8). However, it is not possible for an aircraft to operate on all days, without being serviced. Furthermore, all aircrafts must be serviced after 100 flight-hours. Therefore, Daytona should operate two Cessna Citation CJ+2s, so that one can assist when the other is being serviced.
The Pilatus PC-12NGs has a maximum cruise speed of 328 mph. Therefore, it is practical to assume that the Daytona’s aircrafts will have an average cruise speed of 250 mph. We can also assume that each aircraft will require twenty minutes for landing and twenty minutes for take-off. Therefore, the average time that will be spent on each mission is shown in the table below.
Table 4
Average Time Spent on Each Mission by Pilatus PC-12NGs

Aircraft Utilization
Annual “Aircraft Days” Expended in Support of Missions Characterized by Passenger Loads and Distances
  401-600 miles 601-800 miles 800-1200 miles 1201-1800 miles 1801-2200 miles
Flying time (Approx.) 2hrs 20min 3hrs 15min 4hrs 45min 7hrs 15min 8 hrs 45 min
Take-off and landing 40 40 40 80 80
Total time  (Approx.) 3hrs 3hrs 45 min 5hrs 25 min 8hrs 30min 10hrs
Monthly Demand 6 12 6 3 3
Total Trip hrs. 18hrs 45hrs 32hrs 30min 25hrs 30min 30hrs

The total number of hours that the Pilatus PC-12NGs will fly per month are 151hrs. If we assume that Daytona will require its Pilatus PC-12NGs to fly for only 10 hours per day, then a single plane can carry the company’s passengers for 16days (151/10). Since some of the company’s trips require its plane to be in full service the whole day (1201-2200 miles), the company must have an additional one to serve other customers who may be traveling on the same day. Furthermore, all aircrafts must be serviced after 100 flight-hours, and there is a need for a plane to serve Daytona’s customers during the service period. Therefore, Daytona should operate two Pilatus PC-12NGs.
Cost
Cessna Citation CJ+2s
The cost of a new Cessna Citation CJ+2s is $7,044,000. Accordingly, two Cessna Citation CJ+2s will cost $14,088,000 (2012 Operation Planning Guide, 4). The variable costs per hour of the aircraft, including its fuel and maintenance expenses is $1,119.18. As a result, the total annual variable costs incurred by the two Cessna Citation CJ+2s planes will be $3,196,378.08 ($1,119.18*12month*238hrs). The fixed costs for each aircraft will be hull insurance, liability insurance, hull insurance per $100, liability insurance per $M, maintenance software programs, and miscellaneous services, which will cost $17,610, $16,500, $0.25, $165, $1700, and $5,676 respectively. The total fixed costs for the two aircrafts will be $87972. The periodic costs of the aircraft are: hot-section inspection, engine overhaul, paint, interior refurbishment, and modernization, which cost $52,494, $239,412, $36,317, $93,166, and $31,089 respectively. Therefore, the total annual periodic costs for each aircraft will be $452,478, making the total annual periodic costs for the two aircrafts to be $904,956. The personnel costs for each aircraft are captain salary and first officer salary, which are $75,327 and $53,139 respectively. Daytona should have three Captains and three first officers to assist in case of sick leave or off. The annual personnel costs for each Cessna Citation CJ+2s will be $128,466, and for the two aircrafts will be $385398. Additionally, Daytona will incur an extra hangar and miscellaneous expense of $23,356 and $4,595 for each aircraft. In this regard, the cost of operating a fleet of two Cessna Citation CJ+2s will be $18,718,606.
Pilatus PC-12NGs
The cost of a new Pilatus PC-12NGs is $4,581,742. Accordingly, two Pilatus PC-12NGs will cost $9,163,484 (2012 Operation Planning Guide, 3). The variable costs per hour of the aircraft, including its fuel and maintenance expenses is $625.57. As a result, the total annual variable costs incurred by the two Pilatus PC-12NGs planes will be $1,133,532 ($625.57*12month*151hrs). The fixed costs for each aircraft will be hull insurance, liability insurance, hull insurance per $100, liability insurance per $M, maintenance software programs, and miscellaneous services, which will cost $28,407, $5,500, $0.62, $220, $2,500, and $2,938. Therefore, the total fixed costs for the two aircrafts will be $84,490. The periodic costs of the aircraft are: hot-section inspection, engine overhaul, paint, interior refurbishment, and modernization, which cost $17,200, $322,792, $31,521, $61,907, and $22,035 respectively. The total annual periodic costs for each aircraft will be $455455, making the total annual periodic costs for the aircrafts to be $910,910. There will also be training costs of $8,000 for each pilot and $4,050 for the maintenance team of each aircraft. The total training and maintenance costs for the two aircrafts will be $24,100. The personnel costs are captain salary and first officer salary, which are $60,900 and $32,756 respectively. Daytona should have three Captains and three first officers to assist in case of sick leave or off. The annual personnel costs for each Pilatus PC-12NGs will be $93656, and for the two aircrafts, it will be $280968. Additionally, Daytona will incur an extra hangar and miscellaneous expense of $16,713 and $2,360 for each aircraft. In this regard, the cost of operating a fleet of two Pilatus PC-12NGs will be $11,635,630.
Recommendation
The purpose of this report is to advise the President of Executive Jets of Daytona and investors on the appropriate fleet mix and cost of recapitalizing the company’s fleet with a new Cessna Citation CJ2+s and Pilatus PC-12NGs. Therefore, this report will enable the management to implement strategies that will make Daytona manage its operations efficiently. The analysis of Daytona’s market has shown that the company has three distinct customer groups: those from large companies, those from mid-sized companies, and leisure travelers. Each of this customer groups has their unique travel preferences, with those from business companies being sensitive to time, those from medium-sized companies considering both time and price, and leisure travelers who are not interested in saving time but prefer large cabins. Due to Daytona’s market base, the company should use both the Cessna Citation CJ2+s and the Pilatus PC-12NGs aircrafts. The Cessna Citation CJ2+s offers fast and high-quality executive trips while Pilatus PC-12NGs is slow but has a large and spacious cabin. Daytona fleet should be composed of 2 Cessna Citation CJ2+s and 2 Pilatus PC-12NGs aircrafts, which will make the company serve all its customers comfortably.

Works Cited

“2012 Operation Planning Guide.” Available from http://awin.aviationweek.com/portals/awin/pdfs/BCAOpPlanningGuide/2012_Production.pdf
Cessna. “Specification and Description: Unit 525A-0490 to TBD.” Citation CJ2+, Aug. 2011. Available from https://web.archive.org/web/20141026194244/http://cessna.txtav.com:80/~/media/Files/citation/cj2/CJ2%20SD%20Unit%200490%20To%20TBD.ashx.
“Monthly Program Profile: Pilatus PC-12.” The Weekly of Business Aviation, 29 Feb., 2016, p.10-11. Available from http://images.link.pentonaviation.com/Web/PentonAv/%7B41675d71-e8ce-4984-b784-9c7313a174cd%7D_The_Weekly_of_Business_Aviation_02-29-16_BAV.pdf.
Pilatus. Just the Facts. PC-12 NG Overview. Available from https://www.pilatus-aircraft.com/data/document/Pilatus-Aircraft-Ltd-PC-12NG-JustTheFacts.pdf.

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