THE BOEING 737-700ER
10 February 2006
Long Haul at Lower Cost
On 31 January 2006, with an order for two planes from All Nippon Airways, Boeing launched the 737700ER, the longest-range version of its popular 737 family of aircraft. Boeing is explicitly targeting
low cost carriers looking to expand their operations to include transatlantic services, as well as
traditional carriers wishing to exploit opportunities on new, non-stop niche markets.
John Weatherill
Director, Airline Planning
The Long Range Recipe. The –700ER is inspired by the Boeing Business Jet (BBJ), itself a
derivative of the 737-700. The new aircraft uses the fuselage of the –700, but the larger wings of the
–800. This change, along with additional fuel storage capacity, gives the 737-700ER a range of up to
5,510 nautical miles (10,200 km) – almost 65% further than the current 737-700. And unlike the BBJ,
which is designed for low-density, all business configurations, the new –700ER can achieve its range
limits with a load of 126 passengers in a two-class configuration. By comparison, most 737-700
operators configure their aircraft with 125-140 seats.
The range of the new 737-700ER is comparable to that of the Boeing 767-400 and the Airbus A330300, but as a narrowbody jet with a much lower operating weight, will be less costly to operate on a
per flight basis. As a result, airlines can begin exploring long haul markets, including transoceanic city
pairs, which may be too thin to support non-stop service with existing aircraft.
Range Limits and Traffic Requirements. The map below compares the approximate range limits
from Toronto of the existing 737-700 and the new 737-700ER. While the original –700 cannot reach
Europe without stopping to refuel, the new –700ER can make any point in Western or Eastern Europe,
and can reach as far as North Africa on a non-stop basis.
YYZ
737-700
Range Limit
737-700 ER
Range Limit
New non-stop
route oppotunites
With a seating capacity of only 126 passengers, the market size required to support non-stop service
is significantly lower than that required to support service with larger jets of comparable range. To
achieve an average load factor of 80%, a 737-700ER operator would need to carry 73,500
passengers annually. By comparison, the 80% load factor threshold requires 143,000 passengers for
the 767-400, or 172,000 passengers for A330-300.
Page 3
February 2006
InterVISTAS’ Canadian Aviation Intelligence Report
Copyright ©2006 InterVISTAS Consulting Inc., all rights reserved.
THE BOEING 737-700ER – CON’T
Air Service Implications. The –700ER opens up the transatlantic market to carriers intent on adding
smaller spokes to their North American or European hubs (e.g., London-Winnipeg) or, for LCCs with
less-developed hub structures, the opportunity to serve primary markets (e.g., Toronto-London) with a
lower cost narrowbody jet.
Among traditional airlines, U.S. carriers have recently focused on redeploying 757/767 aircraft from
the low-yield domestic market to higher-yield transatlantic routes, where competition from low cost
carriers is far less intense. Although this is a sound strategy that has produced positive results,
efforts have been constrained by aircraft size (the 767 is too large for many markets) and aircraft
range (the 757 can reach only Western Europe from the Northeast U.S.). The 737-700ER offers a
solution to both problems, especially for carriers currently holding orders and options for 737 family
aircraft.
On the low-cost side, some see the introduction of transatlantic services by LCCs to be inevitable.
With lower trip costs (and potentially lower per-seat costs) than existing widebody options, including
the revolutionary 787, the –700ER may be the catalyst for this expansion. Low cost carriers that
currently operate 737-family aircraft, such as WestJet and Ireland-based Ryanair, can also take
advantage of commonality between the –700ER and their existing fleets, further reducing the cost of
operating these aircraft.
Planning for the 737-700ER.
As the delivery of the first
737-700ER is scheduled to
occur in early 2007, airports
and communities should
begin examining the
implications of this aircraft on
their long-range air services.
Given the extended planning
cycle required for
international services,
communities should start
laying the research
groundwork necessary to
quantify and communicate
these new air service
opportunities to airlines that
begin to order the 737700ER.
Page 4
February 2006
InterVISTAS’ Canadian Aviation Intelligence Report
Copyright ©2006 InterVISTAS Consulting Inc., all rights reserved.