November 15, 2021
A Cost-Benefit Analysis of Replacing Your Private Jet Engine
Life-Limited Parts Need Replacing on Your Business Jet. Is It Worth It?
Owning a private jet is fraught with major decision-making. Many of those decisions are fueled with cost-benefit analysis, including the decision to purchase a used private jet, the decision to upgrade avionics and the cabin, and even the decision to overhaul engines.
Engines are life-limited parts, meaning they have a true end of their useful lives. Business aviation operators have to decide how and if it’s time to overhaul the engines, or if it’s a better decision to simply purchase a different business jet.
Overhauling a private jet’s engines will require a large investment - hundreds of thousands of dollars - so you can’t make the decision without consulting your financial advisor and other industry experts and conducting a cost-benefit analysis.
Options for Overhauling the Engine in Your Used Private Jet
Private jet owners have four options when it’s time to replace or overhaul their jet’s engines. Costs for each option will vary, depending on engine type and size, number of engines, and the amount of work necessary to perform the task, among other things.
Maintenance, repair, and overhaul (MRO) work
Hourly engine maintenance plan coverage
Source a replacement engine
Sell the jet outright, with worn engines
Smart business jet owners have purchased maintenance plans that make overhauling engines more affordable. But if you don’t, you may need to get your jet into an MRO shop to either repair or replace the engine at full retail prices. And finally, you can sell the aircraft outright, as-is. Selling your private jet with run-out engines will likely mean you receive only scrap value for it, based on parts that can be salvaged and reused in other used private jets.
The Cost of MRO Overhauls or Replacement of Business Jet Engines
An MRO overhaul can cost in the neighborhood of $800,000, depending on engine size, plus an additional $12,000 for the act of removing and replacing the engine.
These overhauls take up to six weeks, assuming all parts are readily available. If you need to continue to fly the aircraft during this time, you can rent an engine for about $40,000 - plus that mounting and removal fee.
If you opt to replace an engine with one you’ve purchased, you may find that the engine itself is quite difficult to source. You’ll also need to have proof that the second-hand engine is airworthy and that it has been run every 30 days - the frequency as required in engine maintenance manuals - or that it has been properly preserved for no more than two years as indicated in its maintenance manual.
According to Pratt & Whitney, if your overhaul cost will be more than 80 percent of a new engine exchange price, you should consider replacing the engine with a new one. But this option is likely only viable for operators who plan to use their business jet for several more years.
A Maintenance Plan is the Smartest Choice for Owning a Private Jet
Having your used private jet’s engine covered under an hourly maintenance plan gives you more options for engine overhauls.
Under the maintenance plan, your overhaul costs are covered. Reputable maintenance plans often assume financial risk should the overhaul cost more than estimated. Because of this, fixed-cost maintenance plans tend to be worth the cost.
Does an Overhaul Make Sense for Your Used Private Jet?
Your decision to overhaul your business jet engines depend on your budget and plans for the future. When you chose to purchase a pre-owned private jet for sale, you knew that it came with cycles already on the engine, and thus its life was more limited than a new jet.
If you own a relatively new jet and can extend your jet’s useful life with an overhaul, that’s a smarter choice than overhauling an aircraft that has only a few years of useful life left. Where your private jet is in its lifecycle should be the foundation of your decision.
If turnaround time is too lengthy, business aviation operators may also opt to sell and put proceeds toward a newer private jet for sale. This is the smart option if the residual value of your aircraft is low; you could put the funds you’d spend on an overhaul toward a newer jet.
Owning a Private Jet is Complicated; Get Help from Industry Experts
Just as you’d rely on an International Aircraft Dealers Association Accredited Dealer to help you navigate buying a used private jet for sale, you’ll also want to rely on industry experts to help you finance, maintain, and insure your aircraft.
Fortunately, through years of experience in the industry and a great reputation, IADA Accredited Aircraft Dealers have established professional relationships with industry service providers and can help you identify who to work with to ensure your private jet is airworthy for years to come and that your aviation operations department follows all necessary domestic and international laws.
Browse a list of reputable aviation service providers at AircraftExchange.com, the sole listing website for IADA Accredited Dealers.