* Sees unit revenues increasing slightly this year
* Good demand in Germany, on North Atlantic routes
* Eurowings profit hit by expansion costs
* Shares jump 7 percent (Adds comment on ATC, weather disruption)
By Victoria Bryan
BERLIN, July 31 (Reuters) - Lufthansa raised its ticket price forecasts for the rest of 2018 on Tuesday as the demise of rival Air Berlin drove demand on German and North Atlantic routes, lifting its shares.
Germany’s dominant airline said it now expected a slight increase in unit revenues, which measures pricing, against a previous stable forecast.
“We have turned more positive on top line performance,” Chief Financial Officer Ulrik Svensson said, citing good booking data for the normally busy third quarter.
While short-haul rivals such as easyJet, Ryanair and Laudamotion have scrambled to fill the gap left by Air Berlin on routes out of Germany and Austria, Lufthansa remains dominant on the more lucrative long-haul routes.
Its positive comments on pricing could also be a good signal for IAG, which owns British Airways and Iberia and which reports its results on Friday, Goodbody analysts said.
Lufthansa shares rose almost 7 percent, their biggest jump in 1.5 years, while IAG and Air France-KLM , which reports on Wednesday, rose by more than 2 percent.
Like others, Lufthansa has suffered disruption from air traffic control strikes, staffing issues and bad weather, leading to extra costs of 70 to 80 million euros in the second quarter, and Svensson said it would invest more in reserve crews and aircraft in the future.
EasyJet has said it will invest more into its standby reserves, while IAG’s Vueling unit is expected to have been hit especially hard by the ATC strikes.
Despite the more positive pricing outlook, the costs of expanding its Eurowings budget unit and a higher fuel price mean Lufthansa will not see the benefit in its bottom line.
It maintained its forecast for 2018 adjusted earnings before interest and tax to fall slightly from 2017’s record level of 2.97 billion euros ($3.5 billion) and said unit costs would be down 1 percent, against a previous 1 to 2 percent target.
The airline again reduced its forecast for capacity growth this year, to 8 percent from 8.5 percent, due to Eurowings.
Svensson said it had taken longer than expected to bring 77 Air Berlin planes up to Lufthansa’s standards, causing delays and cancellations.
Integration costs for Eurowings hit 120 million euros in the first half, and it expects a further 50 million in the third quarter. Eurowings is targeting a return to profit next year.
Lufthansa reported second quarter adjusted EBIT of 982 million euros, against expectations of 942 million euros. ($1 = 0.8537 euros) (Reporting by Victoria Bryan Editing by Maria Sheahan and Alexander Smith)