June 5, 2017 / 11:53 PM / 2 years ago

Lufthansa CEO optimistic on demand, eyes Italy opportunities

CANCUN, Mexico (Reuters) - Demand for Lufthansa (LHAG.DE) flights is better than expected this year, with traffic from the United States and Asia developing well, the carrier’s chief executive said on Monday.

Lufthansa Chief Executive Officer Carsten Spohr delivers his speech at the annual shareholders meeting in Hamburg, Germany May 5 2017. REUTERS/Fabian Bimmer

Lufthansa will also look at any opportunities that arise in Italy depending on what happens with stricken carrier Alitalia, though it has no plans to buy the Italian airline, Carsten Spohr told journalists on the sidelines of an airline industry meeting in Mexico.

“From an outlook perspective we are getting more optimistic every week regarding our demand situation, especially from the U.S. and from Asia,” Spohr said.

He said that should any Alitalia planes come up for sale, then Lufthansa would look at those and also suggested that Lufthansa could increase capacity via its Eurowings budget unit.

Low-cost rivals Ryanair (RYA.I), easyJet (EZJ.L) and Vueling (ICAG.L) are also looking to replace capacity that could be lost depending on what happens with Alitalia, whose future is under review.

“Eurowings is a pan-European model. If there’s opportunities to bring Eurowings into Italy... that could be one option,” Spohr said.

Lufthansa currently expects underlying earnings before interest and tax to fall slightly this year from last year’s 1.75 billion euros.

“The guidance is as it is,” Spohr said when asked if he would be upgrading the profit outlook.

Last year, carriers in Europe reported a drop in demand from travelers from Asia after attacks in Paris, Brussels and Nice, but traffic flows have made a recovery this year.

However, a spate of attacks in Britain since March have raised fears that travelers could be deterred again.

Japan Airlines Co (9201.T) said on Monday that demand for travel from Japan to Europe remained slow.

“One of the things that has been very sluggish is the flow of Japanese people to Europe because of the threat of terrorism,” Chairman Masaru Onishi said.

Reporting by Victoria Bryan; Editing by Andrew Hay

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