The highly touted Boeing 7E7 Dreamliner took one step closer to reality today with the announcement that after months of intense proposal reviews, a final decision regarding engine manufacturing was reached. And the winners are... drum roll, please, General Electric
The Dreamliner, which received its moniker from an online poll conducted by Time Warner's
With a capacity of 200 to 250 passengers, the 7E7 will be slightly smaller than most intercontinental airliners currently in operation, but much more efficient. According to specs, fuel consumption will be cut by 20%, providing a range of more than 9,000 miles. Boeing anticipates the Dreamliner will open up new routes, such as Singapore to Denver, without a layover. Passengers may not mind the long flight either; higher cabin pressure, increased humidity, and high-speed Internet connectivity are just a sampling of the proposed features designed to enhance cabin comfort.
Through an unprecedented design feature, the 7E7 can be fitted with either engine interchangeably. Both General Electric's engine, called the GE Next Generation (GENX), and the Rolls-Royce Trent 1000 will be capable of delivering between 55,000 and 70,000 pounds of thrust with dramatically lower emissions.
Boeing projects a demand for 3,500 Dreamliners within the next 20 years, many in Asian markets. With a price tag of $120 million per plane, it doesn't take a calculator to figure that the engine contracts represent immense revenue potential for both Rolls-Royce and General Electric. Based on a more conservative figure of 3,000 units, initial sales could top $60 billion. The estimate jumps to $100 billion when spares and maintenance are included.
Other companies, however, will have their hands in the pie. Up-front development costs are enormous, and Rolls-Royce is already in talks with revenue-sharing partners such as Honeywell
Frequent fliers may applaud the release of a new aircraft, but investors should tread carefully. Until sluggish passenger volume improves, demand for new planes will be restrained, meaning that $100 billion figure attached to the Dreamliner may only be, well, a dream.
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Fool contributor Nathan Slaughter owns none of the shares listed.