Big 787 orders come flying in

Virgin Atlantic and Air Canada delivered double victories to Boeing on Tuesday, choosing the company's 787 Dreamliner over the competing Airbus A350 model.

Meanwhile, Boeing said it was partnering with London-based Virgin Atlantic to develop a biofuel for commercial jets as part of an effort to reduce carbon emissions.

Virgin Atlantic's 15-plane order is worth $2.8 billion at list prices and about $1.8 billion with standard discounts as estimated by aircraft-valuation firm Avitas. It is the largest European order to date for the jet, due to enter service in 2008.

Virgin Atlantic also took options for eight 787s and purchase rights for 20 more of the jets, which Boeing is touting for its increased fuel efficiency. The planes will be added to its fleet in 2011.

Separately, Air Canada said it is increasing its order to 37 from 14, making it the largest North American customer for the plane.

The 23 additional jets are worth about $3.5 billion at list prices and about $2.4 billion with discounts as estimated by Avitas. The revised agreement also includes options for an additional 23 787s.

The new aircraft, to be delivered in 2010, will replace Air Canada's existing Airbus A340s and A330s and Boeing 767s.

The 787-9 burns about 27 percent less fuel than many other aircraft, thanks to its partial use of composite materials instead of metal. So far, 44 customers have ordered 544 Dreamliners, officials said.

Boeing executives and Virgin Atlantic Chairman Richard Branson announced the orders and the partnership at a Tuesday news conference where they said they hope to launch a test flight of a biofuel-powered 747 in the next year.

Officials at both companies declined to comment on the value of their investment in the biofuel project, which follows a similar airline-industry initiative.

"We look forward to finding and testing alternative fuels and developing and implementing solutions that will reduce emissions both in the air and on the ground," said Boeing CEO Jim McNerney. "This is important work with high objectives."

It could take at least five years before any biofuel, likely made from cellulosic material, is widely available on commercial flights.

Branson said he hopes the new fuel and more widespread use of the twin-engine 787s will help reduce the pollution generated by the airline industry, which is responsible for about 2 percent of the world's carbon emissions.

"We all have a responsibility whether as airline owners, airline manufacturers or engine makers to reduce that carbon footprint, which has grown over the years," he said. "Doing nothing should not be an option."

Boeing shares rose 3 cents to close at $93.67 Tuesday after reaching their latest all-time high of $94.96 earlier in the session.