A good thing has come to an end...April 23, 2005 was an important date in aviation history: the date Cessna (now Textron Aviation) first flew their Citation Mustang. May 11, 2017 was another important date in aviation history: Textron Aviation announced that the company would no longer produce the entry-level jet, marking the end of an incredible era in business and commercial aviation.
The Mustang has been a big part of my personal history as well of that of jetAVIVA's. As a firm we have transacted nearly 200 Mustangs, a history of which we're quite proud. With 472 Mustangs having been delivered into the hands of owners all around the world, the Mustang will go down as one of the most successful platforms Cessna has ever made...frankly, too successful.
A Harvard Business School case study could be scripted around the Mustang in demonstrating the impact of the Global Financial Crisis of 2008 and business aviation. All one needs to do is look at the production rates since certification:
Mustang Production Rates
Nearly 50% of all Mustangs built were built in two of the twelve years of production. I'll say that again, nearly 50% of all Mustangs built were built in two of the twelve TOTAL years of production. The aircraft was so popular at Cessna's initial announcement that Cessna management was forecasting 100+ units/year in perpetuity. The company subsequently started delivering on that promise by ramping up production to support said demand. Unfortunately, the GFC hit and the wheels came off of the bus. It took three years for Cessna to right-size production, but at that point, it was too late. Too many planes were built and the market was subsequently flooded with the baby Citations. In my personal estimate, 150 too many Mustangs were built, significantly skewing the supply needed to match demand, and at a rate that ultimately adversely affected long-term residual value for owners. Pre-recession, Mustangs were trading at $700,000+ premiums above the factory price of $2.5M. Today, pre-owned Mustangs can be bought for $1.5M or even less. The incredible reality of today is that the price one pays for a Mustang is not at all aligned with the value proposition that the jet provides owners.
With a modern G1000 cockpit, dual FADEC controlled motors, efficient fuel flows, incredibly easy operating characteristics, Cessna quality service and support, 340 knot cruising speed, 41,000’ cruising altitudes, and 1000 mile range, the Mustang remains the perfect entry level jet for both owner/operators and owners sitting in the back.
While it is unlikely that we will ever see a new Mustang come out of Textron's Independence factory again, the company is committed to continuing service and support for the Mustang. However, as all good Buddhists know, the simple answer to whether all good things must come to an end is, alas, yes.
While jetAVIVA's market reports cover over a dozen different models of turbine aircraft, a proper goodbye to the Mustang is duly needed. Independent of the Mustang's history, if you're a buyer, seller, industry stakeholder, or enthusiast, we hope you will enjoy the contents of this quarterly market report and that you find it helpful in better understand the dynamics of the market.
And remember: Life is Short. Fly a jet.