Embraer 195. Courtesy, Embraer

Embraer is dropping plans to enter the 130-160 seat narrowbody market and instead focusing on developing a re-engined variant of its E-jet family that could be ready in 2018, the company announced Thursday.

The Brazilian manufacturer has been analyzing the potential of developing a narrowbody for some time, but Commercial Aviation president Paulo Cesar Souza e Silva said that recent changes in the marketplace, with Airbus and Boeing both now developing re-engined versions of their Airbus A320 and Boeing 737, make clear it would be “very challenging” for a new entrant to persuade airlines to switch to an all new aircraft type.

“Our shareholders would probably not like this venture,” he said.

Instead, Embraer will focus on developing a version of its E-jet family that would be equipped with a new engine, new landing gear and other new technology. It could potentially be a stretch of the E-195, de Souza e Silva said, and it would consolidate Embraer’s market leadership in the 70-130 seat market.

De Souza e Silva said anticipated entry into service date would be around 2018. A launch customer could be announced around mid-2012. “We are seeing a lot of interest in developing this type of aircraft,” he said.

A name for the new variant has yet to be decided—for now, Embraer refers to it as a new generation E-jet—and an engine supplier has also yet to be picked. Embraer has a long-established relationship with GE and the CF34, but de Souza e Silva said other options are being considered.

De Souza de Silva said the manufacturer was in talks with its customers to define the future requirements of the 70-120 seat segment.

“We will further refine our findings. There are a lot of details we don’t know yet because we want to listen to our customers, but we have a rough idea of what this aircraft should be,” he said.

De Souza de Silva added that there would remain a lot of commonality with the existing E-jet family. “We are convinced this is the way to go forward, keeping the same aircraft but upgrading it,” he said.