It competed with the McDonnell Douglas MD-80 series, then with the Airbus A320 family which prompted Boeing to update its offer with the 737 Next Generation, thus designating the -300/400/500 variants as the 737 Classic.

The family also featured a redesigned vertical stabilizer with a dorsal fin at the base.

That aircraft, the initial model of the 737 Classic series, first flew in February 1984 and entered service in December of that year with Southwest Airlines.

A further stretched model, the 737-400, was launched with an order for 25 aircraft with 30 options from Piedmont Airlines in June 1986.

That aircraft, which was designed as a replacement for the 737-200 and had similar passenger capacity and dimensions, as well as the longest range of any member of the 737 Classic family, first flew in June 1989 and entered service with Southwest Airlines in 1990.

The overall thrust was also reduced, from 24,000 to 20,000 lbf (107 to 89 kN), mostly due to the reduction in bypass ratio.

[3] The 737 Classic saw introduction of Speed Trim System (STS), a flight augmentation system that adjusts the stabilizer automatically at low speed, low weight, aft center of gravity and high thrust with autopilot disengaged.

Such a single-channel design is not common for augmentation systems that have full control of the stabilizer.

[6] The limited flight envelope protections on the 737 Next Generation series, as well as MCAS on the 737 MAX, are later extensions of this system.

[9] The 300 series remained in production until the last aircraft was delivered to Air New Zealand on December 17, 1999,[10] registration ZK-NGJ.

In December 2008, Southwest Airlines selected Boeing to retrofit the 737-300 with a new set of instruments, hardware, and software, to improve commonality with the 737-700, as well as to support the Required Navigation Performance initiative, but that order was later cancelled and the retrofits never took place.

The 737-400 design was launched in 1985 to fill the gap between the 737-300 and the 757-200, and competed with the Airbus A320 and McDonnell Douglas MD-80.

[12] It included a tail bumper to prevent tailscrapes during take-off (an early issue with the 757), and a strengthened wing spar.

Alaska Airlines was the first to convert one of their 400s from regular service to an aircraft with the ability to handle 10 pallets.

The -500 was offered, due to customer demand, as a modern and direct replacement of the 737-200, incorporating the improvements of the 737 Classic series in a model that allowed longer routes with fewer passengers to be more economical than with the 737-300.

A single prototype flew 375 hours for the certification process,[9] and on February 28, 1990, Southwest Airlines received the first delivery.

[18] Many countries operate the 737 passenger and cargo variants in government or military applications including Brazil, Chile, China.

Colombia, India, Indonesia, Kuwait, Mexico, Niger, Peru, South Korea, Taiwan, Thailand, United Arab Emirates, Venezuela and others.