An aircraft is composed of several highly integrated and complex systems that enable it to deliver safe and comfortable flight. Its functionality is therefore strongly dependent on the safe operation of these systems within their designed optimal efficiencies. The air cycle machine (ACM) is a subsystem of the pressurized air conditioner (PACK) system, its key function is to enable refrigeration of the air in order to comply with the wide range of cabin environment requirements for maintaining aircraft safety and passenger comfort. The operation of the ACM is governed by the PACK control system which can mask degradation in its component during operation until severe degradation or failure results. The required maintenance is then both costly and disruptive. The ACM has been reported as one of the most frequently replaced subsystem and has been therefore reported as a major driver of unscheduled maintenance by the operators. This paper aims to investigate the component level degradation in the ACM at various severities and quantify the impact of its performance characteristics and associated interdependencies at PACK system level. In this paper, Cranfield University’s in-house environmental control system (ECS) simulation framework called simscape ECS simulation under all conditions (SESAC) has been implemented to evaluate degradation in the ACM components in a representative Boeing 737-800 aircraft PACK model. The fault modes of interest are those highlighted by the operators and correspond to the ACM compressor, turbine, and interconnecting mechanical shaft efficiency degradation. Simulation results, in terms of temperature, pressure, and mass flow at various degradation severities, are presented and discussed for each component at PACK system level. The acquired results suggest that, for all three fault modes, the PACK controller can compensate for an ACM degradation severity of up to 20%, allowing the PACK to sustain the delivery of the demanded temperature and mass flow. For degradation severity of above 20%, the PACK is able to deliver the demanded temperature with a substantially reduced mass flow. This has a significant impact on the PACK’s ability to meet the cabin demand efficiently. The methodology reported and the findings conceived to serve as an enabler toward formulating an effective PACK fault diagnostics and condition monitoring solution at system level, and fault reasoning at vehicle level.