Lufthansa says demand may have bottomed out-paper

FRANKFURT, June 27 (Reuters) - Deutsche Lufthansa (LHAG.DE: Quote, Profile, Research) is seeing signs that demand for air traffic is bottoming out but high jet fuel prices could still prevent it from making a profit this year, its chief executive told a newspaper.

"My feeling is: We are just about to level out," CEO Wolfgang Mayrhuber told Germany's Suedeutsche Zeitung in an interview published on Saturday.

Mayrhuber's comments contrast with a more gloomy outlook for the airline industry voiced by Ryanair's (RYA.I: Quote, Profile, Research) CEO Michael O'Leary in an interview with Germany's Spiegel magazine provided to Reuters before publication on Monday.

"The worst is yet to come," O'Leary was quoted as saying.

He reaffirmed an outlook made earlier this month that the Irish carrier would double its earnings in 2009, as it wins cost-conscious travellers from rival airlines.

Lufthansa's Mayrhuber also told Sueddeutsche Zeitung the company was preparing for a prolonged downturn and it was suffering from price competition.

Whether the German airline posted a profit this year would depend on changes in fuel prices, he said. The company would seek to cut more costs to remain able to pay dividends and to fund investments.

He also said Lufthansa would not defer the delivery of new planes this year but might have to resort to such steps in 2010. (Reporting by Ludwig Burger; editing by Sue Thomas)