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Boeing in deal to sell 12 new 737s to Icelandair

NEW YORK (AP) -- Boeing will sell 12 of its new 737 version to Icelandair, the company said Thursday.

The initial order, which is not yet final, is worth a combined $1.2 billion at list prices, but airlines rarely pay full price.

The new 737, which Boeing calls the Max, has a new engine and is billed as the most fuel efficient plane available of its kind.

Rising oil prices have made jet fuel the largest expense for many airlines, forcing them to upgrade their fleets to more efficient aircraft. Boeing Co., which is based in Chicago, has reached several deals to sell the new jets in the past few months, including a $14.7 billion order from United Airlines for 150 planes.

Production is expected to begin in 2015 and deliveries are projected for 2017.