No one has data on depreciation of an aircraft that does not exist yet. However, we do know that it is much less expensive than competitors so my hypothesis is that it will experience low depreciation rates similar to the Pilatus. I admit this is my personal view so we will have to see. I also think there is a probability that Cirrus will raise the price to circa $2.4 million (from current 1.96 million) after FAA certification to bring it into line with competitors. This move would virtually eliminate any depreciation for the first 5 years or so but again is complete speculation. The aircraft should be certified in the first quarter next year so lets see what happens.
Jason C is correct that you can purchase a delivery position in the secondary market that will give you a total purchase price of approximately $1.7 million($300k discount)
The early delivery positions have a $1.39 million purchase price (plus inflation) which works out to about $1.58 million today. Positions trade for about $200k so you can be in for 1.78m plus options. Say 170k for options and you are “all in” with a 3 year warranty for $1.95m. I think many small groups will form around these aircraft to spread the purchase price and fixed costs.
For private owners in Europe you can add $400k in VAT.
Cirrus_Man wrote:
However, we do know that it is much less expensive than competitors so my hypothesis is that it will experience low depreciation rates similar to the Pilatus.
Why? The Pilatus is far more expensive so how would that be a sensible proxy? Why not the Eclipse, the Mustang or the Phenom 100 all of which were cheaper than the Pilatus?
Now depreciation is normal and I have accepted it so I am not suggesting it is a deal breaker for everyone but I do think it is disingenuous to suggest it won’t face meaningful depreciation.
Given they have pre-sold production out to 2018, how will they generate revenues in the interim? It may be three years before people put down deposits on new aircraft at retail pricing. Why would you when you can just buy a delivery slot earlier for less?
Vat avoidance is another reason why I think groups will form. Easier to create a company with a “real” business for VAT registration although I admit the position on this is not clear.
Exactly, Jason – i was just going to mention the VAT. And the training? The insurance?
I wonder how expensive the maintenance on the SF50 can be? But should not be higher than on a Meridian, right?
I wonder how expensive the maintenance on the SF50 can be? But should not be higher than on a Meridian, right?
Perhaps not in theory but I assume the engine will be on a program and so the owners will be paying by the hour for overhauls and hot sections. Hence the cash cost of operating the aircraft is higher although depreciation related to engine hours is lower. I wonder also if they will have a ProParts equivalent (covering parts including consumables also again paid by the hour).
The full options and maintenance programs have not been announced yet but should be shortly and Cirrus has indicated that there will be a “power by the hour” program for the engine. I would also guess that they will have a CMX option like on the 22’s where all maintenance is included both parts and labor except for things like new tires. Regarding operating costs, Cirrus have said that it should fall in between the Meridien and the TBM, based on the Conklin and Decker numbers which sounds about right.
@Jason
Position holders have to pay 10% of purchase price (incl options) 12 months before delivery and another 10% 6 months before delivery and 80% on delivery. In the USA it wil be possible to finance this last piece. The early position holders have already done this as first deliveries are Q1-Q2 next year. Therefore, Cirrus will be collecting a lot of cash over the next 5 years. (provided they get it certified)
Cirrus_Man wrote:
Cirrus have said that it should fall in between the Meridien and the TBM, based on the Conklin and Decker numbers which sounds about right.
For those interested you can see those numbers yourself on the C&D site.
It outputs (for variable costs – fuel, airframe maintenance, labor and parts, engine restoration and miscellaneous costs):
Mustang: $1015/hr
TBM900: $835/hr
PA46TP: $608/hr
@Cirrus_Man how have you configured your options? Radar for all of them?
