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UPDATE 1-Brazil airline Azul to order Airbus wide-body jets -sources

(Adds details on competition, Boeing losing $4.5 billion fighter jet contract)

PARIS/SAO PAULO, April 22 (Reuters) - Brazil's third-biggest airline, Azul Linhas Aereas, is set to announce a fleet expansion on Wednesday including an order for its first wide-body aircraft from European planemaker Airbus, according to two industry sources.

The order would vault Azul, which is controlled by JetBlue Airways Corp founder David Neeleman, into the international market with long-range jumbo jets challenging regional heavyweight Latam Airlines Group SA.

Airbus and U.S. rival Boeing Co battle intensely for such orders. Airbus has recently offered deep discounts on its wide-body A330 to tempt lower-cost airlines away from Boeing's more modern 787 Dreamliner.

Airbus and Boeing officials declined to comment on the matter. Azul announced a Wednesday press conference but offered no details of the announcement.

Missing out on a major deal from Brazil's fastest-growing airline would be the second big blow to Boeing since December in a key emerging market where it has been ramping up its presence.

Swedish planemaker Saab AB snagged a coveted $4.5 billion fighter jet contract with Brazil's air force at the end of last year after news of U.S. spying on Brazilians helped derail Boeing's chances for the deal.

(Reporting by Tim Hepher and Brad Haynes; Editing by Lisa Shumaker)