This paper investigates the thermal effectiveness of a TEMA E shell and one-path tube condenser along the condensation path, including effects of leakage of air as a non-condensing gas. Condensation of steam occurs in the shell side and cooling water flows through the tubes. A new formulation is developed for the maximum heat transfer rate between two streams in the heat exchanger, when one stream undergoes a condensation process. Effects of the air mass flow rate, upstream cooling water and steam-air mixture temperatures, steam flow rate and cooling water flow rate on the effectiveness are numerically investigated. The results lead to a new correlation for the local thermal effectiveness as a function of upstream cooling water temperature, air mass flow rate and the local values of heat capacitance ratio and dimensionless temperature, defined as the ratio of the cooling water temperature gradient to the difference between the condensation and inlet cooling water temperatures within an arbitrary volume control. Some illustrative examples of the variation of the local effectiveness based on the proposed correlation are also presented.