January 6, 2017 / 5:04 PM / 7 months ago

Lufthansa 2017 growth plans driven by Air Berlin, Brussels deals

BERLIN, Jan 6 (Reuters) - Lufthansa outlined plans for 4 percent capacity growth in 2017, not including recent deals to expand Eurowings via Air Berlin and Brussels Airlines, as Europe's airlines engage in a race for customers against a backdrop of rising fuel prices.

Lufthansa said in an investor presentation on Friday that its network airlines - Lufthansa, Austrian and Swiss - would grow the number of seats on offer by 3 percent, while Eurowings would grow 19 percent.

Including recent deals to lease 38 planes and crew from Air Berlin plus take over Brussels Airlines, group growth would be a reported 12.5 percent, according to the slides.

UBS earlier downgraded Lufthansa shares to "sell" from "neutral", saying it was concerned that yields - a measure of pricing - would remain negative in 2017, as European carriers continue to add seats despite likely being unable to pass on increased fuel costs to passengers.

Lufthansa also on Friday confirmed a forecast for 2016's adjusted earnings before interest and tax (EBIT) to remain around 2015's level of 1.8 billion euros. It is expected to give a first forecast for 2017 profit when it reports full-year results in March. ($1 = 0.9470 euros) (Reporting by Victoria Bryan; Editing by Adrian Croft)

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