Yahoo Finance UPDATE 2-Embraer counters report of new jet, says no major capex plan
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Brazilian planemaker says focused on existing products
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AerCap chief sees no new jet making impact before late 2030s
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WSJ reports Embraer exploring jet to compete with Airbus, Boeing
(Adds AerCap comments, paragraphs 9,10)
By Abhijith Ganapavaram, Shivansh Tiwary and Tim Hepher
May 1 (Reuters) - Brazilian planemaker Embraer on Wednesday played down a report that it is studying a new jet to compete directly with Boeing and Airbus, saying it has no plans for a major cycle of spending.
The Wall Street Journal reported that the world's third-largest planemaker is exploring options for a narrowbody jet to break out of its regional niche and "compete head-on" with the best-selling Boeing 737 MAX and Airbus A320neo families.
Planemakers invest billions of dollars in new models, which take years to enter the market.
Studies determined Embraer has the know-how and manufacturing capability to develop a next-generation jet, the report said, citing people familiar with the matter.
"Embraer certainly has the capability to develop a new narrowbody aircraft. However, we have a young and very successful portfolio of products developed in recent years, and we are really focused on selling those products and making Embraer bigger and stronger," an Embraer spokesperson said.
"We don't have any plan for a sizeable cycle of capex at this time."
Embraer competes in the regional market with its E2 family for 90 to 120 passengers, below the duopoly's core 150-seat-plus market, which China recently entered with its C919.
Its main competitor is the 110-130-seat A220 which Airbus bought in 2018 after Canada's Bombardier abandoned plans to compete at the lower end of the jet market.
The world's largest airplane lessor dismissed the prospect that Embraer would disrupt the market leaders any time soon.
"I doubt we'll see anything in material numbers before the end of the 2030s. It's just impossible to develop a new aircraft, particularly if you need a new engine technology, you would have to be well down the track already to have that delivering this side of 2030. So that's not happening," AerCap Chief Executive Aengus Kelly told analysts.
The WSJ reported Embraer's plans are in their infancy but include an assessment of potential payload and range.
Embraer was for years linked to the future development plans of Boeing and industry strategists say it once planned to develop a pair of small planes, while Boeing focused on a trio of compatible of jets to replace the larger 737 family.
In 2018, Embraer agreed to sell its commercial aerospace arm to Boeing but the deal collapsed in 2020, leaving Embraer without a partner.
Since then, Embraer has vowed to remain independent, though Brazil's previous government suggested China as a potential partner. Industry sources have also cited India as a candidate.
Planemakers are still harvesting the previous round of investments just over a decade ago, with Boeing recently shelving talk of a new plane. But some analysts have urged Boeing to start afresh to overcome a corporate crisis, triggering speculation over how rivals might respond. (Reporting by Abhijith Ganapavaram and Shivansh Tiwary in Bengaluru, Tim Hepher in Paris; Editing by Shilpi Majumdar, Elaine Hardcastle)
