Market Presence. In the context of re-engining from both manufacturers, the effect on residual values of the A320 and B737 has been relatively modest in terms of deviation from previous projections. While re-engining offers improvement, it is more incremental than evolutionary. If the difference between the existing model and the intended replacement was more significant, then there would be less incentive to order both the existing A320 and the A320neo so close together in terms of delivery dates. Whereas the move from the B737-200 to the B737-300 represented a significant change, the re-engining can be more likened to the change from the CF6-80A powered B767 to one powered by the CF6-80C2B1F. While Boeing may have discounted the B737-800 to maintain production through to the service entry of the B737MAX, the pressure to do so has been less muted than if an all new aircraft had been under development.
Market Outlook. Values of the -800 have remained stable in the short term due to limited availability of the MAX and because of the strength of the market and relatively low fuel prices. A higher price of fuel will accelerate this replacement process thereby causing values of existing products to fall that much faster. Aircraft being delivered would then likely be used just as much as replacement as growth capacity and would therefore displace existing equipment. The expected future decline in values of existing products needs to be seen in the context of prevailing forecasts. Many future value projections will have already compensated for the introduction of a re-engined aircraft. The service entry of the B737MAX represents a significant improvement in performance and just as values of the early A320s are facing weakness, so too are -800s. Previous popularity should not be automatically extrapolated for the future but there can be no denying how the -800 has remained the most desirable of narrowbodies through to the arrival of the MAX.