SHARES in engine maker Rolls-Royce soared yesterday following the announcement that Boeing had won its first customer for the 7E7 Dreamliner.

Rolls-Royce is vying with US company General Electric to win a contract to supply engines for 50 Dreamliner aircraft ordered by All Nippon Airways (ANA).

Analysts believe a deal with ANA would be worth about £1.1bn to Rolls-Royce, with sentiment also boosted by the prospect of other airlines placing orders for the planes.

ANA said deliveries of the Dreamliner would begin in 2008 and replace its 61-strong fleet of medium-sized aircraft operating on routes to Asia and within Japan.

Shares in Rolls-Royce have risen by 32 per cent this year on improving morale in the aerospace and defence sector, and advanced another four per cent, or 9p, to close at 239p.

The company was chosen last month, along with General Electric, to supply engines for the Dreamliner, which has a range of more than 8,000 miles and can carry 300 passengers.

One of the two companies will supply engines for Boeing's first order with ANA.

At the time of the announcement, Rolls-Royce chief executive Sir John Rose said the deal with Boeing would provide healthy returns and build on its successful engine portfolio.

Boeing formally offered the 7E7 Dreamliner for sale in December and has estimated there is a market for up to 3,000 planes.

The Dreamliner offers wider seats and aisles, larger windows and uses 20 per cent less fuel than comparable aircraft.

Andrew Gollan, an aviation expert at Numis Securities, said: "There is huge momentum behind Rolls-Royce at the moment and today's rise (in the share price) could be a bit of headline reading."

But sentiment was more likely to reflect the formal launch of the Dreamliner rather than the prospects of Rolls-Royce winning the engine deal with ANA, considering that 95 per cent of its fleet is currently powered by engines from rival General Electric, he said.