This section requires expansion with: more information about the aircraft's history. (November 2010)
Following the success of the Boeing 737-200 Advanced, Boeing wanted to increase capacity and range, incorporating improvements to upgrade the plane to modern specifications, while also retaining commonality with previous 737 variants. Development began in 1979, and in 1980 preliminary aircraft specifications were released at the Farnborough Airshow. In March 1981, USAir and Southwest Airlines each ordered 10 aircraft, with an option for 20 more.
The new series featured CFM56turbofan engines, yielding significant gains in fuel economy and a reduction in noise, but also posing an engineering challenge given the low ground clearance of the 737. Boeing and engine supplier CFMI solved the problem by placing the engine ahead of (rather than below) the wing, and by moving engine accessories to the sides (rather than the bottom) of the engine pod, giving the 737 a distinctive non-circular air intake.
The wing incorporated a number of changes for improved aerodynamics. The wing tip was extended 9 inches (23 cm). The leading-edge slats and trailing-edge flaps were adjusted. The flight deck was improved with the optional EFIS (Electronic Flight Instrumentation System), and the passenger cabin incorporated improvements similar to those on the Boeing 757.
The prototype of the -300 rolled out of the Renton plant on January 17, 1984, and first flew on 24 February 1984. After it received its flight certification on November 14, 1984, USAir received the first aircraft on 28 November. A very popular aircraft, Boeing received 252 orders for it in 1985, and over 1000 throughout its production. The 300 series remained in production until 1999 when the last aircraft was delivered to Air New Zealand on 17 December 1999, registration ZK-NGJ.
The 737-300 can be retrofitted with Aviation PartnersBoeing winglets. The 737-300 retrofitted with winglets is designated the -300SP (Special Performance). Used passenger -300 aircraft have also been converted to freighter versions. The 737-300 is now replaced by the 737-700 in the Boeing 737 Next Generation family.
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. It stretched the 737-300 another 10 ft (3.45 m) to carry up to 168 passengers. It included a tail bumper to prevent tailscrapes during take-off (an early issue with the 757), and a strengthened wing spar. The prototype rolled out on January 26, 1988, and flew for the first time on 19 February 1988.
The aircraft entered service on September 15, 1988, with launch customer Piedmont Airlines (25 aircraft ordered).
The 737-400F was not a model delivered by Boeing but a converted 737-400 to an all cargo aircraft. The Boeing 737-400 never included winglets as an option just like the Boeing 737-600. 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 airline has also converted five more into fixed combi aircraft for half passenger and freight. These 737-400 Combi aircraft are now in service. The 737-400 is now replaced by the 737-800 in the Boeing 737 Next Generation family.
The -500 series 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. The fuselage length of the -500 is 1 ft 7 in (47 cm) longer than the 737-200, accommodating up to 132 passengers. Both glass and older style mechanical cockpits arrangements were available. Using the CFM56-3 engine also gave a 25% increase in fuel efficiency over the older -200s P&W engines.
The 737-500 was launched in 1987, by Southwest Airlines, with an order for 20 aircraft, and flew for the first time on 30 June 1989. A single prototype flew 375 hours for the certification process, and on February 28, 1990 Southwest Airlines received the first delivery. The 737-500 has become a favorite of some Russian airlines, with Nordavia, Rossiya Airlines, S7 Airlines, Sky Express, Transaero, and Yamal Airlines all buying second-hand models of the aircraft to replace aging Soviet-built aircraft and/or expand their fleets. Aerolíneas Argentinas is replacing its 737-200s with second-hand 737-500s. The 737-500 is now replaced by the 737-600 in the Boeing 737 Next Generation family. However, unlike the 737-500, the 737-600 has been a slow seller for Boeing since its introduction, with only 69 aircraft delivered.
As the retirement of all 737 Classic models has accelerated, with retirement of 300s and -500s climbing 40% in 2012, the 737-500 has fared worse because of its smaller size. Aircraft newer than 21 years old are being retired (vs. 24 years old for the 737-300). While a few 737-300s are slated for freighter conversion, there is no demand at all for a -500 freighter conversion.
The Boeing 737 Classic were involved in 39 Hull-loss Accidents with a total of 1,168 fatalities as of October 2013. Notable accidents and incidents involving the 737 Classics (-300/-400/-500) include:
May 24, 1988: TACA Flight 110, en route to New Orleans suffered double engine failure due to a severe hail storm. The pilot conducted a successful forced landing on a grass levee with no injuries. The aircraft was repaired and returned to service. As a result of this incident further engine development was carried out to prevent flame-out in severe weather conditions.
January 8, 1989: Kegworth air disaster: British Midland Flight 92, using a 737-400, crashed outside of East Midlands Airport. Of the eight crew and 118 passengers, 47 passengers died. The left engine had suffered a fan blade fracture and the crew, unfamiliar with the 737-400, shut down the still-functional right engine, causing the aircraft to lose power.
February 1, 1991: USAir Flight 1493, using a 737-300, collided with a SkyWest AirlinesFairchild Metro III while landing in Los Angeles. All of the 12 people on the Fairchild Metro died while 20 passengers and 2 crew members out of 6 crew members and 83 passengers died on the 737.
December 19, 1997: SilkAir Flight 185, using a 737-300 with 97 passengers and 7 crew members, crashed into a river in Indonesia, killing everyone on board, after the pilot intentionally dove the plane into the ground.
September 16, 1998: Continental Airlines Flight 475, using a 737-500, received windshear while landing in Guadalajara, Mexico. None of the passengers and crew received injuries. The aircraft was written off.
March 3, 2001: Thai Airways International Flight 114, a 737-400 bound for Chiang Mai from Bangkok, was destroyed by an explosion of the center wing tank resulting from ignition of the flammable fuel/air mixture in the tank. The source of the ignition energy for the explosion could not be determined with certainty, but the most likely source was an explosion originating at the center wing tank pump as a result of running the pump in the presence of metal shavings and a fuel/air mixture. One flight attendant died.
August 14, 2005: Helios Airways Flight 522, using a 737-300, suffered a gradual decompression which incapacitated 5 of the 6 crew members and all of the 115 passengers. The plane circled around Greece before crashing into a hill, killing everyone on board.
January 23, 2006: A Continental Airlines Boeing 737-500 was preparing for a flight to Bush Intercontinental Airport in Houston from El Paso International Airport, when a maintenance-related engine run-up of the right-hand engine was carried out, sucking in and fatally injuring a mechanic.
June 15, 2006: TNT Airways Flight 352, using a 737-300 Freighter and operating from Liège Airport in Belgium to London Stansted Airport in the UK had to divert to East Midlands Airport due to bad weather. On final approach the autopilot was disengaged for a short period. The aircraft touched down off the runway to the left, resulting in the right main landing gear being detached and the right wing tip and engine scraping the ground. The pilots managed to lift off again and subsequently made an emergency diversion to Birmingham International Airport, where a landing was performed on the remaining two landing gears, during which the aircraft scraped on its nose and right engine. There were no injuries. The cause of the crash was determined to be a poorly timed message from local air traffic control which the pilot misinterpreted, causing him to descend too quickly. The team of pilots were said by the airline to have managed the situation with skill once the error had been detected, however were dismissed from service with the company as a result of the incident.
October 3, 2006: Turkish Airlines Flight 1476, using a 737-400 was hijacked by Hakan Ekinci in Greek airspace. all 107 passengers and 6 crew members on board survived. The aircraft landed safely at Brindisi Airport in Italy.
January 1, 2007: Adam Air Flight 574, using a 737-400 with 96 passengers and six crew members, crashed off the coast of Sulawesi. the occupants were never found, and were presumed dead.
Adam Air Flight 172, showing the collapsed rear fuselage.
5 May 2007 - Kenya Airways Flight 507 a scheduled Abidjan–Douala–Nairobi passenger service, using a 737-800 (as part of Boeing 737 Next Geberation, crashed in the initial stage of its second leg, immediately after takeoff from Douala International Airport. Fatalities 114 (all) Survivors: none 
July 13, 2009: Southwest Airlines Flight 2294 while airborne had a football shaped hole appear and made an emergency landing at Charleston, WV. All 131 onboard survived. The cause is still under investigation.