top of page
  • Writer's pictureGary Crichlow

Are the 737-800s Still in the Game?

Updated: Aug 23, 2023

AV Analysis Week 33

A regular update where our in-house team of aviation experts and ISTAT certified appraisers use our data to analyse values, market movements and notable aviation news.


This week, our Head of Commercial Analysts, Gary Crichlow, gives an overview of Boeing 737-800 values, operators, status and activity.


Introduction

The 737-800 has been a stalwart of the commercial aircraft fleet since its introduction in 1998. Although production ended in 2020, with the last 737-800 delivered in January to China Eastern subsidiary China United Airlines, AviationValues’ fleet data shows 4,729 live passenger aircraft. Of which 4.466 are in active service and 263 are currently stored. There is an active freighter conversion programme, with 163 converted aircraft as of August 2023 and a further 51 known to be undergoing conversion.


The 737-800, along with the other members of the 737 Next Generation family, was superseded in 2017 by the 737 MAX family, with the 737 MAX8 offering the same capacity as the 737-800 but promising significantly improved efficiency. The subsequent global grounding of the MAX family in 2019 prolonged the 737-800’s economically useful life, and the timing of the replacement cycle of the even older 737 classic generations of converted freighters has also benefitted the 737-800.


Along with its main competitor the Airbus A320ceo, the 737-800 was the definitive Narrowbody of its time, with its maximum passenger capacity of 189 passengers proving to be the sweet spot for both full service networks and low cost carriers across every major market.


In more recent years there appears to be a shift towards higher capacity Narrowbodies in the A321neo / 737 MAX 10 size category. With the 737 MAX 8 now fully reinstated in global service, it would be logical to presume that the 737-800s sunset is now inexorable. However, it would be premature to count the 737-800 out just yet. There are still nearly 4,500 aircraft still in passenger service, all using mature CFM56 engines whose reliability is unmatched. The new technology CFM LEAP powerplants on the 737 MAX are yet to achieve comparable time on wing, and there is a tradeoff between that reliability and the gain in fuel efficiency that each operator must consider.


737-800 Fleet Development & Overview

The 737-800 is a mainstay of the commercial aircraft passenger fleet, with 4,989 passenger deliveries over its production run.

It is well represented in every major commercial aviation market across North America, Europe and Asia-Pacific, as well as in Latin America and Africa.


The 10 largest operators account for just under 35% of the total live passenger fleet and represent a mix of operating model (full service network and low cost) and operating geography (North America, Europe and Asia).

A total of 163 737-800s have been converted to freighters; the programme accelerated during the Covid-19 pandemic. Demand for freight capacity soared as the supply of passenger belly cargo evaporated. An additional 51 aircraft are known to currently be earmarked for conversion. It remains to be seen whether the pace of conversions will continue, as the passenger market recovers.


The influence of the passenger market on the appetite for freighter conversion is twofold. Firstly, the recovery in flight activity increases the availability of belly cargo as an alternative to dedicated freighter capacity. Secondly, as discussed in the next section, AviationValues has been noting an increased desire for passenger configured 737-800s, as evidenced by sustained upward pressure on 737-800 Market Values over the past 12 months. This may change the investment decision point for potential conversion candidates.


Value Movements & Transactions / Orders

737-800 historical Market Values have been influenced by the market dynamics of the 737 MAX 8: when the MAX was grounded in 2019, the most logical option for operators was to continue using the 737-800 which their MAX orders were meant to replace. This immediate and unforeseen need for the 737-800 had an immediate effect on Market Value.


The effect of Covid-19 was to effectively reset 737-800 Market Values to their historical trend, with the subsequent reintroduction of the MAX creating downward pressure.


In more recent months, faster than expected recovery in demand has coincided with constraints on the supply of the 737-800s replacement. This has acted to stabilise and even moderately increase Market Values. The chart below shows this trend.

Conclusion

The 737-800 has now been firmly superseded by the 737 MAX 8. However, it still has several considerations that remain strongly in its favour: a large incumbent fleet still in active service, a diverse operator base across different geographic markets and operator types, and an active freighter conversion programme.

The interplay amongst all of these factors is dynamic and complex. AviationValues’ daily updated, objective values, fleet datasets and analytics tools are the perfect platform to easily keep on top of market developments.


Data as of August 2023.


Disclaimer: The purpose of this blog is to provide general information and not to provide advice or guidance in relation to particular circumstances. Readers should not make decisions in reliance on any statement or opinion contained in this blog.


Want to know more about how our data can help you assess the market?





Comments


bottom of page