Design and development
When regular Boeing customer
United Airlines bought the
Airbus A320, this prompted Boeing to update the slower, shorter-range
737 Classic-400 into the more efficient, longer -800 New Generation.
 While the
fly-by-wire A320 is more technologically advanced, in 1991 Boeing initiated development of an updated series of aircraft.
 After working with potential customers, the 737 Next Generation (NG) program was announced on November 17, 1993.
 The 737NG encompasses the −600, −700, −800 and −900 variants, and is the most significant upgrade of the airframe to date. The performance of the 737NG is essentially that of a new airplane, but important commonality is retained from previous 737 generations. The wing was modified, increasing its area by 25% and span by 16 ft (4.88 m), which increased the total fuel capacity by 30%. New quieter and more fuel-efficient
CFM56-7B engines were used.
 These improvements combine to increase the 737's range by 900 nmi, permitting transcontinental service.
 A flight test program was operated by 10 aircraft: 3 -600s, 4 -700s, and 3 -800s.
The passenger cabin of the 737 Next Generation improved on the previous style interior of the
Boeing 757-200 and the
Boeing 737 Classic by incorporating select features from the
777, with larger, more rounded overhead bins and curved ceiling panels. The interior of the 737 Next Generation also became the standard interior on the
Boeing 757-300, and subsequently became optional on the 757-200.
In 2010, the interior of the 737 Next Generation was updated to look similar to that of the
Boeing 787. Known as the Boeing Sky Interior (BSI), it introduces new pivoting overhead bins (a first for a Boeing narrowbody aircraft), new sidewalls, new passenger service units, and
LED mood lighting. Boeing also offers BSI retrofits for older 737NG aircraft.
 Boeing's Space Bins carry 50% more than the pivoting bins, allowing a 737 to hold 174
Production and testing
The first NG to roll out was a −700, on December 8, 1996. This aircraft, the 2,843rd 737 built, first flew on February 9, 1997 with pilots Mike Hewett and Ken Higgins. The prototype −800 rolled out on June 30, 1997 and first flew on July 31, 1997, piloted by Jim McRoberts and again by Hewett. The smallest of the new variants, the −600 series, is identical in size to the −500, launching in December 1997 with an initial flight occurring January 22, 1998; it was granted FAA certification on August 18, 1998.
Boeing increased 737 production from 31.5 to 35 per month in January 2012, to 38 per month in 2013, to 42 per month in 2014, and is planned to reach rates of 47 per month in 2017 and 52 per month in 2018.
The monthly production rate could reach 57 per month in 2019, even to the factory limit of 63 later. A single airplane is produced in
Boeing Renton Factory in 10 days, less than half what it was only a few years ago. The empty
Spirit AeroSystems in
Wichita, Kansas, enters the plant on Day 1.
Electrical wiring is installed on Day 2 and
hydraulic machinery on Day 3. On Day 4 the fuselage is crane-lifted and rotated 90 degrees,
wings are mated to the airplane in a six-hour process, along with
landing gear, and the airplane is again rotated 90 degrees. The final assembly process begins on Day 6 with the installation of
overhead bins, etc. Engines are attached on Day 8. It rolls out of the factory for
test flights on Day 10.
Ryanair 737-800 taking off
In 2004, Boeing offered a Short Field Performance package in response to the needs of
Gol Transportes Aéreos, who frequently operate from restricted airports. The enhancements improve takeoff and landing performance. The optional package is available for the 737NG models and standard equipment for the 737-900ER.
In July 2008, Boeing offered
Messier-Bugatti-Dowty's new carbon brakes for the Next-Gen 737s, which are intended to replace steel brakes and will reduce the weight of the brake package by 550–700 pounds (250–320 kg) depending on whether standard or high-capacity steel brakes were fitted. A weight reduction of 700 pounds (320 kg) on a Boeing 737-800 results in 0.5% reduction in fuel burn.
Delta Air Lines received the first Next-Gen 737 model with this brake package, a 737-700, at the end of July 2008.
On August 21, 2006,
Sky News alleged that Boeing's Next Generation 737s built from 1994 to 2002 contained defective parts. The report stated that various parts of the
airframe produced by
Ducommun were found to be defective by Boeing employees but that Boeing refused to take action. Boeing said that the allegations were "without merit".
 However, a one-year investigation by
Al Jazeera's People & Power series in 2010 questions the safety of some structural parts in 737s.
As early 737NG aircraft become available on the market they are actively marketed to be converted to cargo planes via the Boeing Converted Freighter design as the operational economics are attractive due to the low operating costs and availability of certified pilots on a robust airframe.
Replacement and re-engining
Since 2006, Boeing has discussed replacing the 737 with a "clean sheet" design (internally named "Boeing Y1") that could follow the
Boeing 787 Dreamliner.
 A decision on this replacement was postponed, and delayed into 2011.
On July 20, 2011, Boeing announced plans for a new 737 version to be powered by the
CFM International LEAP-X engine, with
American Airlines intending to order 100 of these aircraft.
 Internally, a minimum change version of the Leap-X is the probable final configuration for the proposed re-engined 737, and is expected to give a 10–12% improvement in fuel burn. Entry into service was planned for 2016 or 2017, with the new models probably being designated 737-7/-8/-9, being based on the 737-700/-800/-900ER respectively.
On August 30, 2011, Boeing confirmed the launch of the 737 new engine variant, called the
 Its new CFM International LEAP-1B engines are expected to provide a 16% lower fuel burn than the current
 Boeing delivered the first 737 MAX 8 to
Malindo Air on May 16, 2017. The 737 MAX competes with the
Airbus A320neo family.