Jetrader - September/October 2008 - 28

appraisal Boeing 737-700 Jack Feir President, Jack B. Feir & Associates Tel: +1 215 345 9009 Email: jackfeir@aol.com BACKGROUND The B737 was a relatively late-comer in the short and medium-range twin-jet market; the Sud Aviation Caravelle and BAC One-Eleven had a lead of several years but, most critically at that time, the Douglas DC-9 was about two years ahead of the B737. The B737 was also launched on a ﬂimsy order of 21 B737-100s for Lufthansa. Additional orders came in so slowly that the company reportedly came very close to abandoning the project. As we all know, the B737 family would become the best-selling jet transport program in history. The current sub-family of B737s—still anachronistically referred to as the “next generation” though launched in 1993—includes four variants designated B737-600, B737-700, B737-800 and B737-900 that are progressively larger models covering the seating capacity range from about 110-215 passengers. They are used primarily on domestic and regional routes of short and medium range, although a few have even been employed on longer ranges such as from the U.S. West Coast to Hawaii. The competing Airbus A320 family also comes in four sizes—small (A318), medium (A319), large (A320) and extra-large (A321). Both manufacturers are now delivering 30-35 aircraft of the two families every month. Even at that rate, it will take about seven years to clear the current backlog of B737s and A320s. The B737NG family has captured a substantial market, with almost 5,000 ordered. Within the NG family, the B737-800s have been ordered in the largest numbers, while the B737-700s account for a somewhat smaller share of orders and deliveries. At the end of June 2008 the orders and deliveries of B737NGs, including BBJ Boeing Business Jet versions, are as indicated in the following table. Model B737-600 B737-700 B737-800 B737-900 B737-BBJ All Orders 69 1,502 2,889 294 144 4,898 Deliveries 69 961 1,433 83 109 2,655 Backlog 0 541 1,456 211 35 2,243 The B737NG family is available with only CFM56 series engines. The preceding B737 “classic” family of B737-300s, -400s and -500s also were powered exclusively by CFM56 engines, so that operators making the transition from Classics to NGs perceive additional commonality beneﬁts. One unique circumstance regarding the 737-700 variant is the unusual operator concentration of the ﬂeet, where Southwest Airlines has 325 in service (probably more by the time you read this), and another 115 on order. The next largest ﬂeet is “only” 54, with AirTran. Market Outlook: Boeing 737NGs should enjoy good future market values; a new single-aisle replacement model from Boeing is not expected until late in the next decade. Although it is possible that B737-700s could eventually be converted into freighters—likely focusing on the larger -800 and -900 variants. Estimated Current and Future Values (Millions of U.S. dollars) Boeing 737-700, CFM56-7B22 engines Year of Build 1999 2002 2005 2008 22.2 27.4 33.8 41.6 21.2 26.1 32.1 39.3 20.1 24.7 30.3 37.0 19.1 23.4 28.6 34.8 18.1 22.1 27.1 32.8 17.1 20.9 25.6 30.9 16.2 19.8 24.2 29.1 15.3 18.7 22.8 27.4 Mid-Year 2008 2009 2010 2011 2012 2013 2014 2015 Typically equipped aircraft in mid-time, mid-life condition Max Takeoff Weight 140,000 lbs Future values include 2.5 percent annual inﬂation. The aircraft values stated herein are the product and property of independent third-party sources, and ISTAT neither approves nor endorses the information contained herein or the use thereof for any purpose whatsoever. Information current as of 7/31/2008 28 The ofﬁcial publication of the International Society of Transport Aircraft Trading

Jetrader - September/October 2008

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