Company says these planes will now have the lowest operating costs in the single-aisle segment with a 7% advantage over the competition.
Boeing on Aug. 30 launched a new family of its best-selling 737 airplane that will be powered by a fuel-efficient engine, citing strong demand from airlines.
The new line will be powered by CFM International's LEAP-1B engines optimized for the 737, the company said.
With that engine the planes will have the lowest operating costs in the single-aisle segment with a 7% advantage over the competition, Boeing said.
Boeing's board of directors has approved the new line based on order commitments for 496 airplanes from five airlines and "a strong business case," the company said in a statement.
"The re-engined 737 will allow Boeing to continue to deliver the most fuel-efficient, most capable airplane with the lowest operating costs in the single-aisle market," said Jim Albaugh, president and chief executive of Boeing Commercial Airplanes.
"Customers tell us they want to improve profitability and fuel efficiency while reducing their environmental footprint," said Albaugh. "This solution meets all three of those needs."
Albaugh said Boeing is working with its customers to finalize the agreements. Deliveries of the re-engined aircraft are scheduled to begin in 2017.
Boeing last month announced it would build a re-engined 737 when American Airlines split a record order for 460 aircraft between Boeing and Europe's Airbus, breaking the firm's monopoly on its fleet.
American Airlines parent AMR Corp. on July 20 said it would buy 200 Boeing 737s and 260 Airbus A320 jets.
Both Boeing and Airbus are selling more fuel-efficient versions of their popular single-aisle passenger jets as part of the deal, valued at $38 billion at list prices.
Boeing's decision to offer its best-selling 737 with a new engine, rather than building an all-new aircraft, was seen as forced by the competition from the Airbus A320neo, which also includes an option for its own version of the LEAP-X engine from CFM International.
Boeing's workhorse medium-haul 737 -- the largest-selling commercial aircraft -- has been under intense pressure since Airbus launched the upgraded and more fuel-efficient A320neo series in December 2010.
The A320neo, available from 2015, has chalked up more than 1,200 orders or options since then.
Still under development, the Leap-X engine is being made by CFM International, a joint venture between General Electric and France's Snecma.
Copyright Agence France-Presse, 2011