The order is expected to involve up to 60 narrowbody airliners, amid brisk demand for the planemakers' latest revamped models offering airlines 15 percent fuel savings.

Talks are at a preliminary stage but Boeing, which already has two TUI-affiliated companies as airline customers, may have an edge over its rival in the race to win the deal, the sources said.

Both plane manufacturers declined to comment.

"We are constantly in product-related discussions with both Airbus and Boeing as a major operator of aircraft across Europe," a TUI Travel spokesman said, declining further comment.

TUI Travel, 56-percent owned by Germany's TUI AG (TUIGn.DE), operates a fleet of 144 aircraft under various brands. It is expected to consolidate aircraft for eight brands in a single order.

It already has an order for 13 Boeing 787 Dreamliners.

After a spate of bankruptcies and consolidation during the region's debt crisis, Europe is once again emerging as a battleground for orders as airlines seek more efficient jets.

Analysts say bargains are available as Airbus and Boeing compete aggressively on prices for the landmark orders.

European low-cost leaders easyJet (EZJ.L) and Ryanair (RYA.I), respectively among the biggest operators of Airbus and Boeing aircraft, could place orders this year.

The French government said this week that Turkish Airlines (THYAO.IS) was negotiating to buy up to 150 planes.

Airbus operator Vueling (VULG.MC) said in late December it was close to placing an order for 10 aircraft. (Reporting by Tim Hepher, Arno Schuetze, Rhys Jones and Victoria Bryan; Editing by James Regan)

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