SAO JOSE DOS CAMPOS, Brazil, July 19 (Reuters) - Gol

and LATAM Airlines are in advanced talks to

add Embraer ( ERJ ) aircraft to their fleets, the head of

Brazil's state development bank BNDES said on Friday, as the

country urges them to buy planes from the local manufacturer.

Gol and the local unit of Chile-based LATAM are two of

Brazil's largest carriers, dominating the country's airline

industry alongside Azul ( AZUL ). However, unlike Azul ( AZUL ), they do

not fly Embraer ( ERJ ) jets.

"They are already well advanced in these talks," BNDES head

Aloizio Mercadante told reporters on the sidelines of an event

at Embraer's ( ERJ ) headquarters, where the bank announced funding to

some of the firm's aircraft exports.

"Obviously there is a commercial secrecy, we cannot go into

details, but the companies are well advanced in the prospect of

flying Embraer ( ERJ )."

Gol did not immediately respond to a request for comment,

while LATAM declined to comment.

Embraer's ( ERJ ) chief executive Francisco Gomes Neto revealed in

an interview with Reuters last month the planemaker was in talks

with Gol and LATAM.

Gol's fleet is made up entirely of Boeing 737 planes,

while LATAM's fleet of single-aisle aircraft is comprised of

Airbus aircraft and it also flies Boeing ( BA ) widebodies.

Global carriers have been facing extended delivery deadlines

from Boeing ( BA ) and Airbus, limiting their ability to add capacity

and giving Embraer's ( ERJ ) smaller aircraft a push as the Brazilian

firm has production slots available from 2026.

President Luiz Inacio Lula da Silva's government has also

been pushing LATAM and Gol to add Embraer ( ERJ ) planes to their fleets

as a way to boost regional aviation in the country and

strengthen the local manufacturer.

Only 12% of Brazil's commercial aircraft fleet is comprised

of Embraer ( ERJ ) planes, according to the government.

Mercadante said getting the carriers to buy Embraer ( ERJ ) aircraft

may be a government requirement to support them financially, as

BNDES and the finance ministry discuss a package to aid airlines

still struggling in the wake of the COVID-19 pandemic.

Gol filed for bankruptcy protection in the United States

earlier this year, while LATAM came out of bankruptcy

proceedings with an $8 billion reorganization plan in late 2022.

Azul ( AZUL ) had to conclude a broad debt restructuring last year.