Boeing CEO says 'getting closer' to a deal with Embraer: CNBC

(Reuters) - Boeing Co (:BA - News) is "getting closer" to a deal with Brazilian aircraft maker Embraer (Sao Paolo:EMBR3.SA - News), the U.S. plane maker's Chief Executive Officer Dennis Muilenburg said in an interview with CNBC television on Thursday.

Boeing had presented a plan to Brazil's government that would give it an 80 to 90 percent stake in a new venture encompassing Embraer commercial jet business, according to reports last week.

"We have structured a deal concept that will satisfy the needs of everybody involved... I am hopeful we can bring that deal to a successful conclusion... We have some work to do, but we are making clear progress," Muilenburg told CNBC.

Boeing's proposed tie-up with Embraer would give it a leading share of the smaller passenger jet market and create stiffer competition for the CSeries aircraft program designed by Canada's Bombardier Inc (BBDb.TO) and backed by European rival Airbus SE (Paris:AIR.PA - News).

Both Boeing and Airbus are raising production rates for new commercial aircraft to record levels as they compete with each other for orders amid strong demand for air travel.

Muilenburg told CNBC the company was ramping up capital expenditure as a percentage of its revenue, with help from recent cuts in the U.S. tax rates.

Boeing expects to makes more than 900 aircraft a year, up from the record 763 in 2017 and 810-815 aircraft deliveries expected in 2018, Muilenburg said, adding that higher production would drive cash flow.

"Last year, our operating cash flow was a little over $13 billion. This year we're guiding to $15 billion of operating cash flow," Muilenburg said.

When asked about the possibility of a trade skirmish between the United States and China, Muilenburg said he was keeping a close eye on dialogues between the two countries.

"We've had very good dialogue with the administration, as well as with our Chinese customers and the Chinese government. I think it's important that we have a balanced approach to trade with China."

(Reporting by Ankit Ajmera in Bengaluru; Editing by Arun Koyyur)