By Saeed Azhar, Tom Arnold and Stanley Carvalho

DUBAI/ABU DHABI, May 22 (Reuters) - UAE health operator NMC Health NMC.L , asset manager Ashmore Group ASHM.L and Dallah Health 4004.SE are separately considering bids for the Jeddah-based medical services business of Saudi Arabian Airlines (Saudia) which could fetch $500 million, sources familiar with the deal said.

Saudia has sent out a request for proposals for the sale of the business through its financial adviser Jadwa Investment as it seeks to reduce non-core assets, they said.

Other Saudi healthcare companies may look at the business as well as healthcare groups such as Saudi German Hospital and Dr. Sulaiman Al Habib Medical Group, sources told Reuters. The sources declined to be identified because details of the bidding process are not public.

Conversations are at an early stage of the process and a final list of bidders will only emerge when first round bids are submitted, they said.

After initial expressions of interest, Saudia is expected to shortlist three or four bidders for the process, one of the sources said.

Saudia did not respond to a Reuters request for comment. Ashmore and NMC both declined to comment, while Dallah, Dr. Sulaiman Al Habib and Saudi German Hospital were not available to comment.

NMC, among the beneficiaries from substantial growth in the region's healthcare sector, has been seeking to expand in Gulf markets.

Ashmore's interest could be among the first of private equity companies to focus on Saudi Arabia's privatisation programme, one of the world's biggest, as the kingdom seeks to raise around $200 billion from the sale of stakes in everything from hospitals to airports.

The kingdom is also listing oil company Saudi Aramco, which it expects will raise another $100 billion.

Saudia Medical Services, the unit for sale, owns a major hospital in Jeddah and is seen as an attractive growth business in Saudi Arabia's second biggest city after Riyadh.

The business is a major healthcare provider to Saudia and a number of its group companies, providing outpatient services such as occupational and aviation medicine in Jeddah.

Saudia has been spinning off some subsidiaries through stock market listings. It listed Saudi Airlines Catering 6004.SE in 2012. The sale of Jeddah medical business would be a complete exit, Reuters has reported, citing a source. Saudia, which named Jaan Albrecht as its new chief executive late last year, has been following a five-year strategy to make the airline profitable by 2020.

(additional reporting by Alexander Cornwell; editing by Susan Thomas) ((Saeed.Azhar@thomsonreuters.com; +65-64035664 ; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))