Boeing pushes ahead with $10bn 7E7 'Dreamliner'

The US aerospace giant Boeing last night sought to put a dreadful year behind it by announcing the $10bn (£6bn) go-ahead for a new 250-seater commercial airliner, the 7E7.

Called the "Dreamliner" within the company, the new mid-sized jet is Boeing's attempt to wrest back the initiative from its arch-rival Airbus Industrie, which has overtaken the American company in both orders and deliveries.

Boeing announced to thousands of workers at its Everett plant in Seattle that the board of the company had given its authority for the new aircraft at a meeting late on Monday night. It was also expected to announce a launch order for the 7E7, possibly from the Japanese carrier All Nippon Airways.

The 7E7 will replace the 757 and the 767, which are coming towards the end of their life, and Boeing has pledged that it will be 20 per cent more cost-efficient to build and operate than existing mid-sized aircraft. The jet is scheduled to enter service in 2008.

The company puts the market for the 7E7 at 2,000 to 3,000 aircraft over the next 20 years. It began serious consideration of the aircraft earlier this year when it was forced to abandon the development of its Sonic Cruiser - a jet aimed at the business market that would have flown at just below supersonic speed.

Boeing examined 20 possible locations for building the 7E7 but in the end opted for Everett, already the home of the 767, 777 and 747 production lines, with the lure of up to $3bn in support from Washington state.

Boeing's new chief executive, Harry Stonecipher, who replaced Phil Condit earlier this month after an ethics scandal, told 3,000 staff: "The 7E7 is a game changer and we're anxious to begin offering it to our airline customers."

The 7E7 will carry between 200 and 300 passengers and will have a range of up to 8,300 nautical miles. Boeing has worked with more than 50 airlines around the world to define the 7E7's requirements.

The go-ahead for the project means that Boeing's sales staff can now begin offering the aircraft to airline customers. The formal launch will take place next year when the company will also decide on engine suppliers for the programme.

Before he was forced to step down, Mr Condit said Boeing was tending towards the option of having two engine choices for the aircraft, one of which would be Rolls-Royce.