Boeing mulls larger engine for biggest 737 MAX-sources

* Boeing mulls putting engine like LEAP-1A on largest 737 MAX

* Boeing looking at pair of mid-market jets with 220-260 seats

* Decision could usher in technology for next generation of jets

* Boeing declines comment, has said mid-market case remains tough

By Tim Hepher and Alwyn Scott

PARIS/NEW YORK, May 29 (Reuters) - Boeing is considering a plan to put a larger engine on its biggest narrowbody airliner in an effort to blunt the runaway success of a rival Airbus jet that outsells it by four to one, industry sources said.

The U.S. planemaker would substitute a modified version of the larger and more powerful LEAP-1A engine used on Airbus's A321neo rather than the LEAP-1B used on the 737 MAX 9, they said.

That would enable Boeing to add range while lengthening the 178-seat jet to fit 12 or more extra passengers and gain a capacity advantage over the 185-seat A321neo, the sources said.

Boeing disputes its rival's claims about the strength of demand in this particular section of the market where Airbus has the most advantage. But leapfrogging Airbus's A321neo offering with more seats would hedge Boeing's position as many airlines opt for bigger planes.

However, the new plane, nicknamed 737 MAX 10 by some in the industry, would bring significant headaches.

Adding the larger engine would mean raising and possibly repositioning the landing gear and recertifying parts, costing an estimated $1-2 billion, according to industry experts.

Boeing's 737 MAX family uses the smaller LEAP engine because the plane's fuselage sits lower to the ground and must therefore have a smaller engine fan.

Having a different engine on the largest 737 could weaken the advantage of commonality with the smaller LEAP engine used on the rest of the 737 MAX fleet, but reflects a growing pragmatism in the face of lost sales.

"It doesn't matter if they are not consistent," said Adam Pilarski, senior vice president at U.S. consultancy Avitas. "They are getting killed."

The maker of the LEAP engines, CFM, which is co-owned by General Electric and France's Safran, declined to comment. A GE spokesman said there was no contractual impediment to using a larger engine for Boeing planes.

"The LEAP engine was designed to have growth capability," he said.

BRUTAL COMPETITION

Recent orders by Vietnam start-up airline VietJet illustrate the Airbus-Boeing fight for narrowbody sales. At last November's Dubai Airshow, Airbus celebrated the sale of 30 A321s to VietJet, while Boeing officials watched from the sidelines.

But last week Boeing pulled off what industry observers saw as a coup by signing an $11 billion order for 100 737 MAXs with the same airline in the presence of President Barack Obama.