Aerospace engineers are calling it the “biggest breakthrough in propulsion technology since the jet engine.”

The “it” in question is called SABRE – a reusable, hybrid jet engine and rocket combo being developed by privately held U.K. defense and aerospace firm Reaction Engines.

Sabre stands for Synergistic Air-Breathing Rocket Engine.

The name alone makes it sound pretty fascinating. But the potential it holds for the aerospace industrycould be mind-blowing. How so?

Well, Reaction Engines sees a day when its engine will be used in a hypersonic spaceplane called Skylon. This spaceplane could be used to launch satellites at around one-tenth of current costs. Or to allow passengers to travel around the world in a mere four hours, traveling at five times the speed of sound.

The question you’re probably asking is whether this actually holds real potential, or if it’s just a fanciful dream. Let’s find out…

A $31 Million Vision

The SABRE technology was hatched over 30 years ago. It’s the brainchild of former Rolls Royce engineer Alan Bond, along with two partners.

In short, it mixes conventional aircraft engine turbine technology with rocket engine technology.

Right off the bat, the fact that aerospace giant BAE Systems Plc (BAESY) recently bought a 20% stake in Reaction Engines for a little over $31 million is proof that this is no frivolous bet.

In turn, this investment unlocked an additional grant for Reaction from the British government.

The money will go directly towards the construction of a ground-based demonstration engine, which should be ready by 2020.

If successful, an unmanned Skylon aircraft – powered by the SABRE engine – will take off like a plane, fly to the edge of space, deploy a satellite into low-Earth orbit, and return to Earth for re-use within 48 hours.

This is known in the aerospace industry as a single-stage-to-orbit launcher.