Jetrader -May/June 2013 - 28

appraisal

Boeing 737-300
Martin P. O’Hanrahan, Director – Asset Valuation
ISTAT Certiﬁed Appraiser
AVITAS, Inc.
Tel: +1-703-476-2300
martin.ohanrahan@avitas.com

Background
Developed as a replacement for the 737-200, the 737-300 enjoyed
a successful production run of 957 units from 1984 to 1999. As of
January, a total of 545 aircraft remained in active service among
a very broad operator base (although about 26 percent of them
were with Southwest Airlines). At the same time, 322 aircraft had
been permanently retired and another 90 units were in storage.
Now regarded as old technology—the type was superseded by the
much more advanced 737-700 in 1997—the 737-300 suffered very
badly during the last two market downturns with large numbers of

aircraft leaving their original operators and being withdrawn and
scrapped. The 737-700, while offering the same passenger capacity,
could ﬂy around 1,000 nautical miles further and featured all of
the technological and design upgrades associated with the 737NG
family. Figure 1 shows the distribution and status of the world’s
737-300 ﬂeet by region as of January 2013.

Current and Future Market Outlook

The trend toward retirement is likely to continue even as we
move toward the next peak in the market cycle. Although the
737-300 has a large number of
Figure 1 re 1
operators, they are increasingly
Boeing 737-300 Passenger Aircraft In Service by Region
going to be based in the developas of January 2013
ing world. Many owners will opt for
Region
In Service
Retired
In Storage
Total
withdrawal with the active ﬂeet
North America
172
52
454
230
supporting some demand for spare
engines. An alternative option is
Europe
126
62
30
218
conversion to freighter conﬁguraAsia/Paciﬁc
22
170
148
tion, and more than 100 units have
Latin America/
6
6
68
56
been reconfigured for this role
Caribbean
to date. The largest operator of
Africa/
47
2
2
43
the passenger models, Southwest
Middle East
Airlines, is gradually phasing out
Grand Total
322
90
957
545
its fleet of 143 737-300s, but
these aircraft are all very highSource: Aviation Week Intelligence Network Fleets Database
cycle and are considered unlikely
to move on to other carriers and
Figure 2
will be retired.
Figure 2 presents AVITAS’s
opinions of current base, current
market and future base values
for all vintages of the 737-300
as published in the 1st Half 2013
BlueBook of Jet Aircraft Values.
AVITAS currently applies a discount
of 18 percent from base to current market value. As far as lease
rates are concerned, at present, we
believe them to be in the range
of around $40,000 to $80,000
per month, depending on aircraft
vintage, term and lessee credit.
In reaching our value opinions,
we use data on actual market
Source: 1st Half 2013 AVITAS BlueBook of Jet Aircraft Values. U.S. dollars in millions.
transactions, various analytical
techniques, a proprietary forecastThe aircraft values stated herein are the product and the property of independent third-party sourcing model and our own extensive
es, and ISTAT neither approves nor endorses the information contained herein or the use thereof for
industry experience.
any purpose whatsoever.
28 The ofﬁcial publication of the International Society of Transport Aircraft Trading

http://www.ISTAT.org

Jetrader -May/June 2013

Table of Contents for the Digital Edition of Jetrader -May/June 2013