ISTAT Jetrader - Spring 2020 - 47

*	 For a long time, the 737-800
allowed six more passengers
in its maximum density
configuration than the A320.
*	 Winglets were introduced
earlier.
*	 The single-engine choice on
the 737NGs has led to a larger
remarketing base than the twosource A320.
*	 Being its first single-aisle
product, Airbus had to win
market share with the A320,
possibly taking on less
established customers with
larger orders resulting in
more bankruptcies than the
737 operators.
*	 The 737-800 sees a higher
fleet concentration with the
non-airline owners, leading to
less fierce competition when
placing aircraft.
Looking at the still firm values
for the older vintages, the freighter
conversion program may appear
premature. However, unlike its
predecessor, the 737 "Classic," the
737NG is under pressure from the
import age restrictions and demand
for the narrowbody freighters is
supported by the strong e-commerce
industry. Conversion slots with all
three providers - Boeing (including
a partnership with STAECO in China),
Bedek and AEI - are sold out to a
variety of customers, including airlines
and lessors.
It may appear logical that the
values and lease rates of the 737800 should be declining as it is being
replaced by the new generation of MAX
aircraft. However, a convergence of
circumstances is holding the values
stable and even allows for moderate
increases. On one hand, the new
generation of aircraft, both Boeing
and Airbus, are yet to deliver the same
reliability as the older generation.
Engine issues and MAX groundings
have encouraged airlines to extend
the use of NGs and ceos, especially in
today's benign fuel environment. On

737-800 ACTIVE FLEET
North
America: 916

Europe: 1,145
Middle East:
283

Africa: 172
Latin
America: 248

Asia Pacific:
2,055

Source: CAPA Fleet Database

The 737-800 values and lease rate have mostly
outperformed those of its main competitor, the Airbus
A320-200.
the other hand, shortages of the engine
MRO capacity and the feedstock needs
for the freighter conversion program
maintain demand for the older aircraft
and engines.
While the new technology teething
issues will undoubtedly be addressed
by the OEMs in the near to mid-term,

the other demand factors are likely to
persist for two to three years. Once the
MAX and neo delivery rates increase
to announced levels and the current
lease extensions start expiring, the
values and lease rates of the 737800 are expected to come under
downward pressure. 

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ISTAT Jetrader - Spring 2020

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