May 1 (Reuters) - Brazilian planemaker Embraer ( ERJ )

on Wednesday played down a report that it is planning

to develop a new jet to compete directly with best-selling

Boeing ( BA ) and Airbus models, 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 new

narrowbody jet to break out of its regional niche and "compete

head-on" with the 737 MAX and A320neo in the busiest part of the

market.

Internal studies have determined that the company has

the technological know-how and manufacturing capability to

develop a next-generation narrowbody, which would be its first

in that larger segment, the report said, citing people familiar

with the matter.

"Embraer ( ERJ ) 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 ( ERJ ) bigger and stronger," an Embraer ( ERJ ) spokesperson said.

"We don't have any plan for a sizeable cycle of capex at

this time," the spokesperson added.

Embraer ( ERJ ) competes in the regional jet market with its E2

family for 90 to 120 passengers, placed underneath the

150-seat-plus market dominated by the transatlantic duopoly of

MAX and A320neo jets and which China recently entered with its

C919.

Its main competitor is the 110-130-seat A220 which Airbus

bought from Bombardier in 2018 after the Canadian manufacturer

abandoned plans to compete at the lower end of the jet market.

Embraer ( ERJ ) was for years linked to the future development plans

of Boeing ( BA ) and industry strategists say it once planned to

develop a pair of small planes, while Boeing ( BA ) focused on a trio

of compatible of jets to replace the larger 737 family.

In 2018, after Airbus bought the Bombardier CSeries

programme for a dollar and renamed it A220, Embraer ( ERJ ) agreed to

sell its own commercial aerospace arm to Boeing ( BA ). But the deal

collapsed two years later, leaving Embraer ( ERJ ) without a partner.

Since then, Embraer ( ERJ ) has sketched out a standalone strategy

and vowed to remain independent, though Brazil's previous

government suggested China could be a potential new partner.

Industry sources have also cited India as a potential

partner for future airplane projects.

The WSJ report said Embraer's ( ERJ ) plans are in their infancy but

the company has been laying the groundwork, including assessing

potential payload and range needs for a new jet.

Planemakers invest billions of dollars into developing

new fuel-efficient highly complex jet models, which can take

years to enter the market.

Boeing ( BA ) CEO Dave Calhoun has said the company will focus on

cash rather than developing a successor to the 737 MAX, but some

analysts have called on Boeing ( BA ) to start afresh with a new design

to smooth its recovery from a series of crises.