Boeing has launched the re-engined 737 program with “order commitments” for 496 aircraft from five airlines.

The 737 New Engine, as Boeing now calls it, was approved by the company’s board at its meeting this week and will enter service in 2017. Powered by the General Electric-Snecma CFM Leap-1B engine, Boeing says the fuel burn of the 737NE is expected to be 16% lower than the current Airbus A320 and 4% lower than the re-engined A320neo. Boeing also claims the aircraft, which was unveiled on July 21 with a launch order from American Airlines, will have 7% lower operating costs than the upcoming Airbus twin.

Boeing has named Boeing Military Aircraft veteran Bob Feldmann as vice president and general manager of the program, while former 747-8 chief engineer Michael Teal is named as vice president, chief project engineer and deputy program manager.

More specific details of the configuration and engine, including its fan size, are still to be determined say both Boeing and CFM. All fan sizes under study are larger than the current 61-in.-diameter fan of the CFM56-7BE on the 737 Next Generation family, a;though none are as wide as the 78-in.-diameter Leap-X version now defined for the A320neo. Trade-studies are thought to be focused on fan sizes ranging from 65 in. to 70 in,, with some reports indicating 66 in as the likely target.

“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,” says Boeing Commercial Airplanes President and CEO Jim Albaugh. The company is going ahead with the development after “seeing overwhelming demand for this new and improved version of the 737. We are working with our customers to finalize these and other agreements in the weeks and months ahead.”

Boeing adds the 737NE will emit 277,000 fewer tons of CO2 and save nearly 175 million lbs. of fuel per year, which equates to $85 million in cost savings when compared to a fleet of 100 aircraft at current standards.