B737-800 Values Weaken Slightly But Still Favored

March 5, 2018

The B737-800 may have been in service for some 20 years but even the oldest examples are still able to command double digit values.

The B737-800 has managed to retain the crown for so many years and still achieves top billing but as the product life cycle extends and newer versions edge ever nearer values and lease rentals have begun to slip. In late 2007, a 1998 B737-800LGW was worth nearly $33 million. Today the value more approximates less than $10 million which is better than some other types that have seen values fall by 90 percent or more.

The B737-800 has now been in service for some 20 years and there exists an extensive difference in terms of performance between those produced in the early years of the program and those being delivered today. With the likely increase in availability of used aircraft and the limited appetite for financing such aircraft, values of the older aircraft have inevitably fallen.

Despite the extensive number of deliveries, the type continues to be viewed with considerable enthusiasm by operators and investors alike. This is due to demand from a myriad of operators worldwide rather than a few mega carriers located in a single region. The -800 has succeeded despite the comparative lack of orders from the U.S. legacy carriers. The reason for the popularity of the B737-800 is due to a number of factors. The passenger capacity is much increased compared to its predecessor – the B737-400. Instead of the 169 passengers of the –400, the –800 can carry a maximum of 189. The payload/range capability of the compromised B737-400 was inadequate on a number of routes. The –800 offers much improved range, around 3,000 nautical miles, thereby matching that of the A320 family and allowing far greater point to point service. The -800 features higher weights and winglets both of which provide operators with range and efficiency.

The payload capability can however, be more important to operators. Absolute ranges are something of an irrelevance on all but a handful of routes. The ability to carry a full passenger load, complete with baggage and even some cargo, over a more modest distance may be more vital. The increase in the average passenger weight used to calculate payload has already had an effect on payload/range capability of earlier aircraft. Compared to the B737-400, the –800 can fly many more passengers the same distance.


The B737-800 also offers improved performance in terms of maintenance intervals on the engine and airframe. Though the CFM56 was upgraded to meet the needs of the B737NG, constant use of engines at maximum power will inevitably see a quicker deterioration in performance. Hot and high operations also increase engine temperatures and higher temperatures usually result in wear and tear. However, the latest /E engines offers longer on wing time.

Boeing paid close attention to improving serviceability on virtually all areas of the B737NG, further differentiating the B737-800 from its predecessors and encouraging replacement sooner than might be expected. Most aircraft types are produced with a variety of MTOWs and the B737-800 is no exception.

Some operators require capacity but not range while others need both. The MTOW ranges between 155,500lbs, which offers a range of 2,000nm with a payload of 162 passengers through to 174,200lbs serving to increase the range to around 3,000nm with the same number of passengers. The B737-800 does not need extra fuel tanks to be installed to achieve the longer range. The highest MTOW of the –800 also allows operators to carry a maximum payload of some 45,000lbs over 2,000nm versus less than 1,200nm for the lowest gross weight version. Performance and fuel efficiency has been enhanced as a result of the incorporation of winglets making it the option of choice. Costing around $1m per aircraft, the winglets can be fitted during or after production. The improvement in fuel burn may be relatively minor but payback can be achieved in less than four years though this is dependent on the price of fuel. In todays environment, the payback can be substantially reduced. Aircraft fitted with winglets are considered the baseline fit. The current value of a new B737-800 with a reasonably high specification is around $47 million. However, opinions can differ markedly even for such a popular model. The creation of new financial instruments to finance aircraft has been partially responsible for this wide variation in values.

The design of the B737-800 still owes much to the original B737 of the 1960s. While Boeing has made considerable improvements to the basic design, the result is more of a comparable, rather than a more advanced product when compared to the A320 family. For once Boeing failed to leapfrog the competition in terms of overall performance capability and operating economics. However, Boeing was constrained by issues of commonality. Either operators can have a material improvement in performance or a measure of commonality can be maintained. Rarely can both demands be accommodated. The B737-800 overcomes the lack luster performance of the –400 by offering much improved range and payload capability. The longer range of the –800 more matches the A320 family without incurring the need for extra fuel tanks. The low and high MTOWs, as well as different engines, still represent a significant difference in terms of payload range capability. Unlike the B737-400, it appears that increasing the MTOW of the –800 post production represents a paper rather than structural change. The launch 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.

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