Boeing has chosen British engine manufacturer Rolls-Royce and General Electric to supply the engines for its planned new 7E7 Dreamliner plane, striking deals that could be worth billions of pounds to the two companies.
Sir John Rose, chief executive of Rolls-Royce, called the decision "highly significant" and said he expected it to provide good financial returns.
The contracts to supply the engines could be worth as much as £22 billion if Boeing's projections for the plane market are correct, said Paul Nisbet, an analyst with JSA Research.
The fuel-efficient, 200-plus passenger jet is to compete with rival Airbus's A300 and A310 planes and to replace Boeing's older 757 and 767 planes. The twin-engine jet is expected to fly commercially in 2008.
Mr Mike Bair, Boeing's 7E7 senior vice president, said the new engine designs "will enable the 7E7 to fly higher, faster, farther, cleaner, quieter and more efficiently than comparable airplanes".
But Mr Bair declined to give details on the agreements.
The decision could pave the way for Boeing's Seattle-based commercial planes division to announce a first customer for the 7E7.
Boeing has yet to announce any takers for the 7E7, which it formally offered for sale in December. Mr Bair reiterated that the company was in serious discussions with many airlines and hoped to have a customer "sooner rather than later" this year.
Analysts said airlines may have been waiting for the engine announcement before deciding whether to buy the new plane.
Boeing has said it believes there could be a market for 2,000 to 3,000 planes similar to the 7E7, meaning the plane would potentially offer a substantial amount of business to the engine makers.
PA