Tuesday's announcement of plans to start selling the mid-size, 200-plus passenger jet capped a two-day meeting of the company's board of directors. It comes just two weeks after a top-level shakeup forced by an ethics scandal and worries about Boeing's direction.

The announcement ended an intense rush by various communities to land assembly work for the new jet, which Boeing will build at its Everett, Washington, plant.

The 7E7 eventually will come in three models and fly 200 to 250 people up to 8300 miles nonstop.

The jet may not be formally launched until mid-2004, or even enter the market before 2008.

"We are 10 for 10 in bringing successful planes to market"

Harry Stonecipher,
Boeing CEO 

But a decision to begin offering it for sale is an important landmark for a company that has been overtaken by Airbus in the airplane-manufacturing business it had long ruled. 

Using more composite materials than metal, the plane would weigh less and use 20% less fuel than other models. It also would have bigger windows and slightly wider aisles and seats than other planes.

Boeing would sell the jet as a replacement for the 757 and 767, with greater range to handle long-distance routes. 

Boeing had not approved any all-new airplane programme since the 777 in 1990.

Tax breaks

New CEO Harry Stonecipher strongly endorsed the building of the 7E7 on his first day in the top post. On Tuesday, Stonecipher said he is optimistic about the jet's prospects. 

"We are 10 for 10 in bringing successful planes to market," he told a crowd of thousands of Boeing workers at a downtown convention centre.

Washington Governor Gary Locke and the Legislature were determined to win the project, especially since being stunned two years ago by Boeing's decision to move its headquarters to Chicago. 

This summer, they agreed to grant the aerospace industry tax breaks totaling $400 million through 2009 - and potentially worth $3.2 billion over 20 years - if Boeing built the 7E7 in the state.

"Today we proved that Washington has the right stuff to lead the next century of aviation." 

Patty Murray,
US Senator

A plane the size of the 7E7 is in demand, an analyst said, adding that Boeing's decision will likely boost workers' morale. 

"This is what they needed to do for a very long time," said Richard Turgeon of Victory Capital Management. "It's a good thing for the company all around." 

Japan Airlines, reportedly a potential launch customer for the 7E7, remains undecided, a spokesman said. 

Boeing made presentations to the airline this fall, and "we have been making our own internal study as we will eventually need replacements for our older Boeing 767 aircraft and Airbus A300 types," JAL spokesman Geoffrey Tudor said in Tokyo. "We have made no decision or commitment on the 7E7."

Airbus disputes claim

In France, Airbus Commercial Director John Leahy disputed the 7E7's appeal, saying Airbus' A330-200, launched in 1998, is just as good a deal.

Leahy has said Airbus estimates that roughly 1800 jets in the 200- to 250-passenger range will be sold over the next two decades, and that the two companies are likely to split those sales. 

Boeing estimates the demand at closer to 3500 jets over the next 20 years, and it expects a majority of those to be the 7E7. 

Boeing has been battered by bad news since its move to Chicago in 2001, from the global aviation downturn after the 2001 attacks to recent scandals involving government contracts. 

Former CEO Phil Condit resigned on 1 December amid a series of ethics scandals in the company's defence business. 

Last month, Boeing fired its chief financial officer, Mike Sears, for unethical conduct, saying he negotiated the hiring of an Air Force missile defence expert while he was still working for the Pentagon and was in a position to influence Boeing contracts. Sears has denied any wrongdoing.