DUBAI, Nov 17 (Reuters) - Middle East airlines are gearing up for increased competition after Dubai carriers went on an order spree at the region's largest air show, watched by potential rivals teasing their own deals.

As widebody jet orders worth $67 billion at list prices tumbled out of the Dubai Airshow, Saudi and Turkish national carriers were finalising blockbuster orders from the sidelines.

"You can't get a better geographic location than the Middle East, connecting 80% of the world's population within an 8-hour flight," said Darren Hulst, vice-president of commercial marketing at planemaker Boeing, which beat Airbus on orders.

Dubai International airport aims to boost capacity to 120 million passengers a year by 2026, up from 100 million today.

Saudi Arabia plans to increase its international routes from 99 to over 250 and more than triple annual passenger traffic to 330 million by 2030 from 109 million in 2019.

The kingdom is spending heavily to transform its aviation sector, moving ahead with plans for a new national airline and massive airport in Riyadh to boost connectivity.

The state-led drive to expand Saudi's aviation sector comes amid simmering economic regional rivalry between the kingdom and the UAE.

But while Saudi's state-backed start-up Riyadh Air positioned an exhibition in vivid livery on the main concourse, the country's carriers held back from placing firm orders.

Turkish Airlines meanwhile, an established player in the lucrative transit market, previewed an order for over 350 planes on the eve of the show. Airbus said there was agreement in principle but sources said nothing formal had been signed.

A senior executive at a Gulf airline said the emergence of Riyadh Air would be a challenge for the Middle East's biggest airlines Emirates and Qatar Airways, which dominate the lucrative transit passenger market.

Both have made Dubai and Doha hubs for international travel.

'AMBITIOUS' PLANS

Dubai has seen a rise in point-to-point traffic following the end of the pandemic and is expecting 86.8 million passengers this year at Dubai International.

"Dubai is really emerging well in the post-pandemic era on many fronts. Dubai's outlook as an aviation hub is very bright despite the current challenges and uncertainties," said aviation analyst Brendan Sobie.

Dubai Airports Chief Executive Paul Griffiths has overseen an expansion of Emirates' Dubai hub into one of the world's busiest airports since joining in 2007.

"The worst thing about being number one is that you get complacent," he said.

"But you have to realise that you always have a target on your back and your competitors are aiming for you."

Griffiths described Saudi Arabia's plans as "ambitious".

State-owned Saudia Group, which owns national carrier Saudi Arabian Airlines and budget carrier flyadeal, said it is ready to sign an order for more than 150 narrow-body jets.

The kingdom has also announced a new airport in Riyadh that could handle 120 million passengers a year by 2030.

"Maybe the competition will be difficult for others because we have already started to build our infrastructure," said Saudia Group's general manager of communications and media affairs, Abdullah Al Shahrani.

Aviation consultant John Strickland, citing the kingdom's domestic population of around 35 million, said there was space for another large Gulf airline based in Saudi Arabia.

"There is enough pie for both operations," he said.

Saudia and Riyadh Air earlier this year ordered 78 Boeing 787s. Riyadh Air CEO Tony Douglas told Reuters this week it expected to place a "sizeable order" of narrow-bodies in coming weeks.

Douglas, hired from Abu Dhabi's Etihad Airways, insists Riyadh Air's business model is different to that of Emirates and Qatar Airways.

"We all understand that the biggest part of their business is transfer traffic and nearly all of our business is point to point," he said.

Riyadh Air, owned by the kingdom's sovereign wealth fund, displayed a royal purple wide-body jet at this week's airshow, ahead of launching operations in 2025. A key target audience is travelers visiting Saudi Arabia and sources told Reuters the new airline also plans to carry people from one country to another via the kingdom, emulating the major Gulf carriers. (Reporting by Pesha Magid, additional reporting by Alexander Cornwell;Editing by Tim Hepher and Elaine Hardcastle)