Future Values of B737NG Need to Avoid Double Counting

The launch of the B737MAX is expected to cause some anxiety for investors and those with an interest in asset values of the existing A320 and B737NG family members. Historically, values of an existing product line have been adversely affected when a replacement aircraft has been launched though the major part of any decline has been more notable in the period immediately before and after the service entry of the new program. Values of the new product usually remain stable in the years following service entry due to the lack of delivery slots in the short term while values of the existing product continue to fade. This was particularly notable with the B737 Classic versus the B737NG in the period 1998-2003. However, the B737NG represented more than a re-engining of the B737 Classic. The B737-800 was larger, the aircraft could fly higher and avionics were much more advanced. The principal differentiation between the B737NG and B737MAX lay with the engines although both Airbus and Boeing will be seeking to include the advantages proffered by RNP approaches using more sophisticated avionics versus those of a decade ago.