Last checked at 
* Q1 adj operating loss 190 mln eur vs poll 123 mln
* Unit costs reduced by 3.7 pct
* Pricing under pressure in Europe, North America
* 2014 profit targets maintained despite strike
* Shares up 3.2 percent (Adds comments from CFO on hubs, rivals, context)
By Victoria Bryan
FRANKFURT, May 6 (Reuters) - Lufthansa, Europe'slargest airline by revenue, said it was working hard in adifficult market to recoup earnings lost through a series ofstrikes as it reported a narrower first-quarter loss on Tuesday.
The Germany-based company is also fighting competition fromlow-cost rivals such as Easyjet, Ryanair andVueling, which are increasing services to larger airports,making it harder for Lufthansa to recoup losses from lastmonth's three-day pilot strike.
Air France-KLM last week also spoke of a tougheconomic climate and airline industry body IATA said on Tuesdaythat demand for air travel had slowed in March, with growth of3.1 percent, compared with 5.6 percent in February.
Lufthansa kept its target for 2014 adjusted operating profitof 1.7-1.9 billion euros, even though strikes have cost it morethan 70 million euros in lost profit this year.
"Compensating for the strike impact is now top of ouragenda, especially as we have not managed to close the gap inforward booking that has appeared during the strike by thepilots' union," Chief Financial Officer Simone Menne toldanalysts and journalists.
She added that March was expected to be the weakest point ofthe market, and April had been better.
Menne also said the airline was seeing yields - a measure ofrevenue per passenger - coming under pressure at its Frankfurtand Munich hubs and that North American routes were notperforming as well as in the past.
Still, while yields fell an adjusted 1 percent in thequarter, a 3.7 percent drop in unit costs, not including theimpacts of lower fuel prices and currency effects, pleasedinvestors and the shares were up 3.2 percent to 18.2 euros as of0958 GMT.
For the quarter, which is traditionally loss-making forairlines, Lufthansa reported an adjusted operating loss of 190million euros ($263.7 million).
Menne said that talks with pilots, whose strike last monthcaused the cancellation of almost 4,000 flights, wereconstructive but added that she could not rule out furtherstrikes.
In Venezuela, where dozens of airlines are owed a total $3.9billion from ticket sales due to currency controls, Menne saidthe group was still waiting on hundreds of millions of euros.The devaluation of the bolivar currency also took 38 millioneuros off first-quarter results, she said.
($1 = 0.7205 Euros) (Reporting by Victoria Bryan; editing by David Goodman andJason Neely)
