Even though the B737-8 has entered service, the demand for the outgoing B737-800 remains sufficiently strong to ensure competition for any used aircraft that enters the market.
IATA may have reported slower traffic growth for July compared to June rising by 6.2 percent but this is still significantly above the long term trend of just over five percent. Load factors for the year have increased to 81.3 percent overall with domestic traffic in particularly rising to 82.8 percent. Such high – and all but record – load factors points to aircraft that are nearly full all the time albeit obscured by much more sophisticated yield management that sees empty seats being sold at very low prices. While traffic overall may have increased by 6.8 percent for the first seven months of the year, domestic traffic which generally involves narrowbody aircraft, saw an increase of 7.9 percent for the same January-July period which compares with a 7.1 percent increase in capacity. The 7.1 percent increase in capacity is notable as this includes problems in delivering A320neo family members suggesting that once deliveries match expectations, then capacity will exceed demand. This has obvious repercussions for load factors and yields.
Nonetheless, the expansion of existing operators and the emergence of new operators cannot be met by the delivery of new cheap aircraft but instead capacity has to be sourced from the used market where operators, investors and lessors vie for ownership. This has led to a considerable competition with a significant number of offers being made sometimes at much higher than market prices. The competition for used B737-800s equipped with winglets, featuring a high MTOW and preferably powered by CFM56-7B26/3 engines at the least, is particularly notable.
With the arrival of the B737-8 this suggests that values of the -800 should be falling at a significant rate but this is not the case. Whatever the small print in EETC offerings may state, commercial jet values fall on average by between 8-10 percent per annum and indeed values of B737-800 have sometimes matched such levels but for 2017 the fall is expected to between 5-7 percent because of exceptional demand though the rate of decline may rise early next year as the reality – and risk – of a new replacement type delivered in ever greater numbers begins to be appreciated.