Aircraft Asset Assessment

Market Presence. The B737-400 is clearly showing its age in terms of efficiency, specification and market orientation. Structure and systems can be traced back to the 1960s, if not before, while performance and capacity reflect the 1980s. Ageing brings wear and tear and rising maintenance costs. However, partly perhaps because of its heritage, the structure remains reasonably robust and provides uncompromising service to a wide range of operators everyday of the year. The limited payload/range performance, combined with a maximum 169 seating capacity, represent the major drawbacks to the B737-400. Operators now demand 150 seats (two classes) and a 3,000nm range capability (though the emphasis is on payload rather than absolute range). Only with a high MTOW and extra fuel tanks can the -400 even reach 2,500nm. Noise levels can be reduced by the installation of optional acoustic panels and Boeing/CFM56 offer a major upgrade to the CFM56-3 series at a list price of $1 million per engine. Southwest was the launch customer for the upgrade which also seeks to improve on wing time. The A320 represents the key competitor to the B737-400. Other competitors to the B737-400 comprise the MD80 series and B727. Such competition is now of little consequence.