By Scott Malone

BOSTON (Reuters) - Diversified U.S. manufacturer Honeywell International Inc (HON.N: Quote, Profile, Research) said on Tuesday it won a $23 billion contract to supply engines for Brazilian aircraft maker Embraer's (EMBR3.SA: Quote, Profile, Research) midsized business jets.

It will be the first time Honeywell is selling engines to Embraer, which competes against Textron Inc (TXT.N: Quote, Profile, Research)'s Cessna unit and General Dynamics Corp (GD.N: Quote, Profile, Research)'s Gulfstream in the fast-growing business jet market.

Honeywell, which is also the world's largest maker of cockpit electronics, expects to begin producing and shipping the engines in 2011, with the new Embraer aircraft going into service in 2012, said Rob Wilson, president of business and general aviation at Honeywell.

He estimated that Embraer would sell about 1,200 of the twin-engine MSJ/MLJ aircraft, which will carry six to eight people and have a range of around 3,000 nautical miles (5,556 km) over the 20-to-25-year life of the program.

The $23 billion estimated value of the contract includes maintenance, parts and spare engines as well as original engines, over the projected life of the aircraft, he said.

MARKET LEVELING OFF

After several years of robust growth, Wilson said Morris Township, New Jersey-based Honeywell expects demand for business jets to level off over the next few years.

However, he said increased demand from emerging markets, particularly in Asia, would help to offset any slowdown in the U.S. economy.