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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 13:19 
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Today's commercial airport terminal is yesterday's bus station. The experience has been degraded in a big way. Who wants to take Greyhound?

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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 15:02 
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Company: Jet Acquisitions
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Username Protected wrote:
Why don't you suggest they go on the low utilization TAP payment plan? No minimum hours on that plan.


Is this something they’ve agreed to recently? We tried real hard last year and the most they would allow was going negative one year in three as long as you paid up front.

I’ll call Williams on Monday and see, but everything I hear is fly it or lose it.


From Williams;

Hello,

We currently do not offer that type of payment method. All of our standard contracts have a 150 hour minimum.

Sincerely,

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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 15:53 
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Company: Ciholas, Inc
Location: KEHR
Aircraft: C560V
My correspondence with Williams TODAY:

Quote:
Hello Mike,

No this is not correct. We have not stopped offering the 300 hour addendum to eliminate the annual minimum for a new enrollment at any point. If the aircraft is currently enrolled on TAP, then the 300 hour addendum is not an option. For a new enrollment, this would not be a concern. Really it shouldn't be anyhow.. I understand the hesitation to pay for hours you might not fly, but this is of little relevance when you consider the cumulative cost of TAP verses commercial costs of just the required services is so dramatically discounted.. in fact once you reach 67 hours per engine, you would have broken even verses standard commercial costs for required service work. Any time flown beyond that represents savings verses paying commercial. At 100-125 hours you are well past this point. In addition, the macro view of this is if you ever have an unscheduled event, ever have any sort of SB, corrosion or if you ever sell the plane, then with enrollment you would save that much more as they are all covered by TAP or paid out of pocket when not enrolled. If you sell, the Aircraft Bluebook, VREF, AIN all demonstrate a near dollar for dollar return on your investment in additional resale value. Even if they are All off by 50%.. so what.. if you recovered 50% of the cost for service you have to pay simply by operating your aircraft, that means you operated your plane for 1/2 price from a service perspective! There is simply nothing in the industry or any other for that matter with such a great bargain. That well offsets any perceived loss from paying for an extra 25 or even statistically 82 additional hours annually.

As for the contract, the coverage is the same as the contract version you have.. when you are ready to enroll, let me know and i will draft a new contract version for you. As this conversation has continued for over 2 years, you would be nest served seeing the latest contract in whatever year you proceed toward enrollment as some items such as qualification standards will change over time. Blue still covers everything except sabotage. All scheduled, unscheduled, all SB's, corrosion at an MPI, SC fees, Line Labor, Shipping, Rentals when required, FOD.. all covered by Blue.

Let me know when you select the right plane for you and we can run an updated enrollment calc and provide you with the required documentation to enroll.

Kind Regards,
Brad

Bradley W. Deuel
Total Assurance Programs/ Global Sales
Williams International; Direct: 800.859.3544 x 2809
Offices: Pontiac, MI 48341 / Miami, Fl 33131


The 300 hour option is only for new enrollments. Not clear if that means after 5 years, you can't renew on the same terms, so it is only a one time "introductory" offer, of it you can continue it in subsequent contract cycles.

I then inquired about the 67 hour break even point mentioned in the email:

Quote:
Hello Mike,

You are very welcome.. and as for commercial costs.. I handle all new enrollments Globally, and when looking at fleet averages by each engine platform, you will find when you consider fully loaded costs considering Line Labor, Service Center Fees, RR, shipping, rentals, on wing service costs, test cell fees etc.. the average commercial Hot Section to be around $490k, the average commercial overhaul to be around $1.18M and then 32 check 1 and 2 services through the check 4 overhaul event for another ~$200k... that is before you factor in any anomalies throughout 10k hours of flight (from 2 engines).. Looking at over 7000 engines on TAP, you can drill down to an average break even point of 67 hours.. some more some less, but the average. And again, it simply is not relevant. Everyone sells their plane. The only debate is for how Much more, not if it is more when enrolled. All major 3rd party reviewers suggest nearly a total return of investment.. which would represent operating for Free form a service perspective. That is why I say it doesn't matter if it is 50%... not that the dollars don't matter, just that whatever you did do, you did for half price in the extreme example of 50%.

If you find an aircraft which is not yet enrolled let me know and I will help with a cost analysis.. if the aircraft is already enrolled, it could be transferred for Free assuming the account is current... which is a large reason why VREF, AIN, Bluebook etc.. etc.. have rated our engine program #1 in the world for the past ~20 consecutive years.. the program stays with the plane.

Have a great time searching for your next aircraft!

Kind Regards,
Brad

For support by phone:
1-800-859-3544 (US)
1-248-960-2929 (Outside of US)


The pricing of off program engine work is startling to say the least. Previously Williams had claimed off program work was price 30% higher than program payments. The above makes is more than double the cost to be off program. His numbers total $1.87M per TBO cycle ($490K for HSI, $1.18M for overhaul, $200K other life cycle costs).

$1.87M for ONE engine! That's $468/hr based on a 4000 hour TBO. WOW!!!!!!!!!

Basically you are better off getting on program with 1 hour to TBO. That's about $800K/engine.

If you have an off program Williams, you have a disposable airplane, or you will be economically forced to join the program when you could have had it all along.

Mike C.

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Email mikec (at) ciholas.com


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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 16:17 
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Uhhh. One size fits all and they can do it better than anyone else. Have we ever heard this before? Don't mix up free markets with corporations trying to create their own little monopoly.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 17:34 
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Joined: 05/23/13
Posts: 8019
Post Likes: +10330
Company: Jet Acquisitions
Location: Franklin, TN 615-739-9091 chip@jetacq.com
Username Protected wrote:
My correspondence with Williams TODAY:

Quote:
Hello Mike,

No this is not correct. We have not stopped offering the 300 hour addendum to eliminate the annual minimum for a new enrollment at any point. If the aircraft is currently enrolled on TAP, then the 300 hour addendum is not an option. For a new enrollment, this would not be a concern. Really it shouldn't be anyhow.. I understand the hesitation to pay for hours you might not fly, but this is of little relevance when you consider the cumulative cost of TAP verses commercial costs of just the required services is so dramatically discounted.. in fact once you reach 67 hours per engine, you would have broken even verses standard commercial costs for required service work. Any time flown beyond that represents savings verses paying commercial. At 100-125 hours you are well past this point. In addition, the macro view of this is if you ever have an unscheduled event, ever have any sort of SB, corrosion or if you ever sell the plane, then with enrollment you would save that much more as they are all covered by TAP or paid out of pocket when not enrolled. If you sell, the Aircraft Bluebook, VREF, AIN all demonstrate a near dollar for dollar return on your investment in additional resale value. Even if they are All off by 50%.. so what.. if you recovered 50% of the cost for service you have to pay simply by operating your aircraft, that means you operated your plane for 1/2 price from a service perspective! There is simply nothing in the industry or any other for that matter with such a great bargain. That well offsets any perceived loss from paying for an extra 25 or even statistically 82 additional hours annually.

As for the contract, the coverage is the same as the contract version you have.. when you are ready to enroll, let me know and i will draft a new contract version for you. As this conversation has continued for over 2 years, you would be nest served seeing the latest contract in whatever year you proceed toward enrollment as some items such as qualification standards will change over time. Blue still covers everything except sabotage. All scheduled, unscheduled, all SB's, corrosion at an MPI, SC fees, Line Labor, Shipping, Rentals when required, FOD.. all covered by Blue.

Let me know when you select the right plane for you and we can run an updated enrollment calc and provide you with the required documentation to enroll.

Kind Regards,
Brad

Bradley W. Deuel
Total Assurance Programs/ Global Sales
Williams International; Direct: 800.859.3544 x 2809
Offices: Pontiac, MI 48341 / Miami, Fl 33131


The 300 hour option is only for new enrollments. Not clear if that means after 5 years, you can't renew on the same terms, so it is only a one time "introductory" offer, of it you can continue it in subsequent contract cycles.

I then inquired about the 67 hour break even point mentioned in the email:

Quote:
Hello Mike,

You are very welcome.. and as for commercial costs.. I handle all new enrollments Globally, and when looking at fleet averages by each engine platform, you will find when you consider fully loaded costs considering Line Labor, Service Center Fees, RR, shipping, rentals, on wing service costs, test cell fees etc.. the average commercial Hot Section to be around $490k, the average commercial overhaul to be around $1.18M and then 32 check 1 and 2 services through the check 4 overhaul event for another ~$200k... that is before you factor in any anomalies throughout 10k hours of flight (from 2 engines).. Looking at over 7000 engines on TAP, you can drill down to an average break even point of 67 hours.. some more some less, but the average. And again, it simply is not relevant. Everyone sells their plane. The only debate is for how Much more, not if it is more when enrolled. All major 3rd party reviewers suggest nearly a total return of investment.. which would represent operating for Free form a service perspective. That is why I say it doesn't matter if it is 50%... not that the dollars don't matter, just that whatever you did do, you did for half price in the extreme example of 50%.

If you find an aircraft which is not yet enrolled let me know and I will help with a cost analysis.. if the aircraft is already enrolled, it could be transferred for Free assuming the account is current... which is a large reason why VREF, AIN, Bluebook etc.. etc.. have rated our engine program #1 in the world for the past ~20 consecutive years.. the program stays with the plane.

Have a great time searching for your next aircraft!

Kind Regards,
Brad

For support by phone:
1-800-859-3544 (US)
1-248-960-2929 (Outside of US)


The pricing of off program engine work is startling to say the least. Previously Williams had claimed off program work was price 30% higher than program payments. The above makes is more than double the cost to be off program. His numbers total $1.87M per TBO cycle ($490K for HSI, $1.18M for overhaul, $200K other life cycle costs).

$1.87M for ONE engine! That's $468/hr based on a 4000 hour TBO. WOW!!!!!!!!!

Basically you are better off getting on program with 1 hour to TBO. That's about $800K/engine.

If you have an off program Williams, you have a disposable airplane, or you will be economically forced to join the program when you could have had it all along.

Mike C.



This does explain the confusion over this issue. We never look twice at an airplane that is not enrolled on TAP or at least on TAP deferred. So, they are willing to bend their own rules if you buy an airplane that isn't on a program at all, so they can get it on the program.


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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 18:15 
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Company: Ciholas, Inc
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Username Protected wrote:
This does explain the confusion over this issue. We never look twice at an airplane that is not enrolled on TAP or at least on TAP deferred. So, they are willing to bend their own rules if you buy an airplane that isn't on a program at all, so they can get it on the program.

They offered me the 300 hour program on a plane that was on program.

I think "new enrollment" means "new customer", not "first time for plane".

Mike C.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 25 Mar 2019, 18:36 
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Username Protected wrote:
This does explain the confusion over this issue. We never look twice at an airplane that is not enrolled on TAP or at least on TAP deferred. So, they are willing to bend their own rules if you buy an airplane that isn't on a program at all, so they can get it on the program.

They offered me the 300 hour program on a plane that was on program.

I think "new enrollment" means "new customer", not "first time for plane".

Mike C.


Well, in that case they are telling you one thing and me another.

Sure, hope that isn't the case. That would be disappointing.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 01:09 
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How is the Honda engine program, is it as Draconian as Williams?


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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 08:39 
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Username Protected wrote:
How is the Honda engine program, is it as Draconian as Williams?

Even if it isn't, will it become that way over time?

It is easy to sell and engine program at the beginning. All revenue, no expenses, huge profit! But then the costs starts to rise some years into the program and the pressure is on to raise rates to achieve similar profit as before.

Mike C.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 09:33 
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Jets are expensive. Who knew?

I am actually impressed by Williams strategy. They offer a solid product as a service in a way and charge appropriately. They have no real competition so they lever their pricing power. Would make a great b school case.

I do wonder why Honda wouldn’t push like heck on an stc for their engines? There are indeed Williams planes off program on the mkt - at the numbers mike quoted maybe it would make sense to swap engines if the performance was a little better.

Hard to imagine spending the full rack rate on an old cj2 with timed out off program motors.


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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 09:55 
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Username Protected wrote:
Jets are expensive. Who knew?

Well, are they expensive intrinsically, or because the pricing is manipulated? Seems to be both.

Quote:
I do wonder why Honda wouldn’t push like heck on an stc for their engines?

That would be wonderful, Honda having a line of engines that can be put on various older airframes. Would create a market much larger than their jet sales.

Problem is, they only have one engine, HF120, ~2000 lbf class, and most retrofits need something larger, perhaps into the 3000 lbf class for Citation IIs, Vs, etc. So they need to build a bigger one. And then you have to develop an STC for each airframe/engine combo which costs money. And then you need to pay for the new engines and the STC.

It is a tough sell. History for jet engine STC companies isn't good either, both Sierra/Innova and Clifford are bankrupt, Nextant is still going, though.

Also, the price spread in engine programs is not large. Per hour, Williams FJ44 is about $160, GE Honda HF120 is about $140. The Williams price is a "mature" price with long history, who knows what the Honda price will be in 5 years when engine work starts to come due. Pretty close all being said, so that makes the STC kind of marginal.

Quote:
Hard to imagine spending the full rack rate on an old cj2 with timed out off program motors.

Cheaper to part out the plane and buy another one. Who would spend ~$2.4M on overhauls for a CJ2? Not being on the program makes the plane disposable.

I don't understand why Williams engines aren't free to the OEM. They should be to win every design. Then Williams gets all its revenue from the operators. Thrust as a service.

Mike C.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 11:31 
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Anthony is right, the folks at Williams are brilliant, build a better, more efficient motor and then charge a premium equal to the savings. Operator burns less gas and feels good and writes you a check instead.

Williams and Garmin... they are the shrewd operators in aviation.


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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 11:41 
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Username Protected wrote:

I don't understand why Williams engines aren't free to the OEM. They should be to win every design. Then Williams gets all its revenue from the operators. Thrust as a service.

Mike C.


Seriously???

Williams puts the same amount of effort (read cost) into each engine of a similar make and model. One operator puts 50 hours a year on the powerplants, someone else 150 hours a year, a third 300 hours a year. How does Williams recover its "thrust service revenues" across these three customers? Each customer has the same set of power plants from Williams, but if charged on a service basis, would pay very different prices for the value received.

Why don't car manufacturers give away their cars and then charge by the mile? Automobiles as a travel service....

Not a great model in this instance. The light users would enjoy a free ride of sorts courtesy of the heavy users.


Last edited on 26 Mar 2019, 11:44, edited 1 time in total.

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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 11:43 
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If you think of the engine program like a Roth IRA, it might be easier to stomach. Yes, Williams sells the initial engine then sells it again (over time) before they have to invest some money into it. Yes, the parts seem unreasonably expensive. And yes, it seems like it isn't as fair as you'd like. But we all know the deal before we get in and the peace-of-mind and value preservation does a lot for the overall market value of the airplane.

I thought about buying an off-program CJ. A friend just sold one for 650K with about 1400 hours left on the motors. So 464/hr if you depreciate the airplane to zero at the end of the engine life. I think the engine program is just under 150/hr on a straight CJ so figure 300 for both so (not considering capital costs of buying a more expensive on-program airplane) this is pretty expensive. If the off-program airplane sheds an engine, you have to throw the airplane away early so the costs are even higher.

My CJ2 had an ignitor break off and go through the back of the engine and Williams had to come out and replace 3 sections of engine. I have no idea what this would have cost if I was not on programs but my cost was zero and three days of downtime. The back half of the engine is where all the expensive parts are so I bet it could have easily been 300K. If this happened with an off-program airplane, you'd have to put 300K into it and afterwards it wouldn't be worth a dime more. That is too much risk for us poor guys (folks that have way too much of our net worth tied up in an airplane), only rich folks should take risks like this.

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Phoenix, AZ
Ridgway, CO


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 Post subject: Re: The Best Light Jet is...
PostPosted: 26 Mar 2019, 11:46 
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No engine time is free. Period.

Compare the cost of an hour to Williams with the cost of an hour in book value reduction... yes there's a difference but it isn't huge.


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