* Reports 70 jump in 2017 profit
* Cuts 2018 capacity plans to 9.5 pct from 12 pct
* Expects slight drop in 2018 profit due to fuel headwind
* Shares up 2.3 pct at top of DAX (Recasts with CEO comments on growth plans, adds shares)
By Victoria Bryan
FRANKFURT, March 15 (Reuters) - Lufthansa has cut its growth plans for the year citing a lack of planes and crew after reporting a 70-percent jump in profit for 2017 on Thursday.
The German airline group plans to increase capacity by 9.5 percent this year, down from plans in January for a 12 percent increase.
Lufthansa has seen delays to deliveries of the Airbus A320neo plane, following engine problems at maker Pratt & Whitney.
It has 10 A320neos in its fleet compared to expectations for 20. There have also been delays to deliveries of the Bombardier CSeries.
Like other carriers such as easyJet, Lufthansa is seeking to fill the gap left in the German market by the collapse of Air Berlin last year.
Lufthansa gave up a plan to acquire leisure carrier Niki from Air Berlin due to competition concerns and is instead expanding its Eurowings budget unit.
However, retraining crews takes time and with other carriers expanding, there is little spare capacity in the market available to rent via wet leases.
“We have a nice problem - too many passengers and too few planes,” Chief Executive Carsten Spohr said.
Lufthansa is in final talks with Niki Lauda on leasing crewed planes from his Laudamotion airline, Spohr said.
Former racing driver Lauda bought Niki, the airline he founded, after Lufthansa dropped its bid.
Lufthansa reported 2017 adjusted earnings before interest and tax of 2.97 billion euros ($3.67 billion), topping the 2.84 billion euros expected by analysts in a Reuters poll.
That marked a third record year in a row but Lufthansa expects profits to slip this year due to fuel price increases.
The group’s shares, which have lost almost 15 percent this year after more than doubling over the course of 2017, were up 1.8 percent in morning trading, making them the second biggest gainer on the DAX.
Lufthansa said it expected stable pricing this year and that so far it was “slightly positive” in the first quarter and the first half of 2018.
Unit revenues - a measure of pricing - rose 1.9 percent in 2017, and were up 2.3 percent in the fourth quarter.
Reflecting the improved results, Lufthansa said it plans to increase its dividend to a better than expected 0.80 euros per share. It said it would aim to keep the payout at that level or higher in the coming years.