November 6, 2014 / 4:38 PM / 3 years ago

UPDATE 1-Turkey's Atlasjet in $3 bln provisional Airbus jet order-sources

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(Adds quotes, details, background)

By Evrim Ergin and Tim Hepher

ISTANBUL/PARIS, Nov 6 (Reuters) - Turkey's Atlasjet has reached a preliminary deal with European planemaker Airbus to buy around 30 aircraft worth $3 billion at list prices as it expands in eastern Europe and central Asia, two people familiar with the matter said.

The tentative agreement covers current-generation A321ceo jets, but the number of units and other details have not been finalised, the people said, asking not to be identified because the talks are confidential.

Atlasjet declined comment.

A spokesman for Airbus, the planemaking unit of Airbus Group, said: "We do not comment on confidential discussions that we may or may not be having with potential customers".

Chief executive Orhan Coskun told Reuters last month the airline was in the final stage of talks to buy up to 50 airplanes and would make an announcement soon.

However, talks continue and industry sources said the number of planes being considered appeared to be closer to 30 and could end up lower depending on the terms of any final deal.

Atlasjet operates a fleet of 19 Airbus planes and flies to about 20 destinations in Turkey, Europe and the Middle East.

Its routes include Arbil in northern Iraq, where it has a partnership called Zagrosjet.

Controlled by Turkish tour operator ETS Group, the airline also plans to build a new brand in South Sudan, has added Atlasjet Ukraine and is now studying services to Kazakhstan.

While it appears to have the upper hand in talks to help Atlasjet expand its fleet, Airbus faces competition from U.S. rival Boeing which is trying to close a recent gap in orders for medium-haul jets.

A person close to the airline said that despite the provisional deal with Airbus, it had not ruled out ordering from Boeing or even another unnamed supplier.

"This kind of agreement is needed to start negotiations but there are still three companies at the table," the person said.

Only Airbus and Boeing make aircraft in the A321's category of 185 passengers in normal layouts.

However, in 2011, Atlasjet signed a letter of intent with Canada's Bombardier whose smaller but newer CSeries, now in development, can hold 160 people in high-density seating.

Atlasjet has previously operated both Boeing and smaller Bombardier regional jets, according to database airfleets.net. (Editing by Leila Abboud; Editing by Elaine Hardcastle)

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