Icelandair, part of FL Group, has ordered the Rolls-Royce Trent 1000 engine to power its new fleet of Boeing 787 Dreamliners in a deal worth up to $650 million.

The contract is for engines to power two of the company’s aircraft, plus up to five purchase rights, and includes a lifetime maintenance agreement. Deliveries are scheduled to begin in 2010.

Firm orders have now been placed for 87 Trent 1000-powered Boeing 787s.

The engine has also been selected by launch customer ANA (All Nippon Airways), Air New Zealand, Northwest Airlines, LOT Polish Airlines and newly formed leasing company, LCAL.