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Flybe airline to maintain UK's A400M army plane-sources

(Fixes typo, paragraph 1)

PARIS, July 7 (Reuters) - British regional airline Flybe has been selected for a contract to provide maintenance for Britain's newest military transporter, the A400M, people familiar with the matter said.

The selection of Europe's third-largest regional aircraft operator to provide support for Britain's defence ministry comes after it beat competition from traditional military contractors and could be unveiled at next week's Farnborough Airshow.

It is the second tie-up between an airline and Britain's cash-pinched military in a week after a consortium supplying RAF Voyager jets, which have a dual role as passenger planes for military personnel and air tankers, agreed to lease one of the converted Airbus A330s to Thomas Cook Airlines.

Airbus Military, which designed the A400M troop and equipment plane, declined to comment on the choice of supplier.

"There is an ongoing selection process for the maintenance, repair and overhaul (MRO) service for the Royal Air Force A400M and it would be inappropriate to comment at this stage," a spokeswoman said by email.

Exeter-based Flybe said it had no immediate comment.

The A400M was designed to carry troops and heavy equipment to remote areas and to support humanitarian missions. It features the largest turbo-prop engines developed in the West.

Britain is expected to receive the first of 22 A400M aircraft it has ordered in September and has been looking for a commercial support deal to help ease its defence budget.

Flybe is in the midst of a turnaround and recently raised 150.1 million British pounds ($255.4 million) in new equity and 8.5 million pounds from the sale of London Gatwick airport slots to easyJet.

Its maintenance arm posted revenues of 35.4 million pounds in the year to end-March, down 5.1 percent from 2012/13, and swung back from a loss to a profit of 2.2 million pounds.

($1 = 0.5877 British Pounds) (Reporting by Tim Hepher; editing by Brian Love and Jason Neely)