Embraer to invest $750 mln in 2 new business jets

SAO PAULO (Reuters) - Brazil's Embraer (EMBR3.SA) (ERJ.N) said on Friday its board had approved plans to invest $750 million to develop two new business jets, its latest foray into one of the fastest growing niches of the aviation market.

The jets, which will fall into the midlight and midsize categories, will seat between seven and 12 passengers plus two crew members, Embraer said in a statement.

Embraer, which got its start manufacturing military aircraft and is now one of the world's top producers of regional jets, has been investing heavily in private planes since 2002 in a bid to diversify its revenue base.

With the new jets, temporarily dubbed the MLJ and the MSJ, Embraer will boost its line-up of executive jets to six. It already offers a super midsize model called the Legacy 600, two very light jets known as the Phenom 100 and 300, and an ultra-large luxury private model named the Lineage 1000.

The new MSJ midsize jet will be ready to take to the skies in the second half of 2012, while the MLJ midlight model will go into operation a year later. Embraer's suppliers will help cover some of the investment needed to develop the planes.

Embraer got the go-ahead for the planes at a time of burgeoning demand for business jets around the world. From the oil-rich Middle East to fast-growing emerging markets like Brazil and Russia, wealthy individuals and corporations are lining up to buy executive jets.

Embraer expects the midlight and midsize categories to account for 21 percent of all business jet deliveries in the next 10 years, which works out to about 13,150 aircraft.

Embraer, short for Empresa Brasileira de Aeronautica, already has a firm order backlog for business jets of $4.5 billion.

(Reporting by Todd Benson, editing by Dave Zimmerman)