This work aims to provide a methodology to enhance the conventional approach of the aircraft trajectory optimisation problem by including engine degradation and real aircraft flight paths within the optimisation framework; thereby the impact of engine degradation on optimum aircraft trajectories were assessed by quantifying the difference in fuel burn and emissions, when flying a trajectory which has been specifically optimised for an aircraft with degraded engines and flying a trajectory which has been optimised for clean engines. For the purpose of this study models of a clean and two degraded engines have been developed based on Exhaust Gas Temperature (EGT) margin deterioration. Aircraft performance model have been developed for short range aircraft with the capability of simulating vertical and horizontal flight profiles provides by the airlines. An emission prediction model was developed to assess NOx emissions of the mission. In addition, a multidisciplinary aircraft trajectory optimisation framework was developed to analyse short range flight trajectories under three cases. Case_1: Aircraft with clean engines, Case_2 and Case_3 were Aircraft with two levels of degraded engines. Two different multi objective optimisation studies were performed; (1) Fuel burn vs Flight time, and (2) Fuel burn vs NOx emission, Finally optimised trajectories generated with degraded engines were compared with the optimised trajectories generated with clean engines. The results have shown impact of engine degradation on optimum aircraft trajectories are significant and in order to reduce fuel burn and emissions aircraft need to fly on an optimised trajectory customised for the degraded engine performance.