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* Q3 operating profit 735 mln eur vs poll 709 mln
* Lowers 2015 operating profit forecast, maintains 2014target
* Strikes wipe 170 mln eur off 2014 profit
* CEO says will remain firm in row with pilots
* Shares drop 6.6 percent, biggest losers in DAX index (Adds comments from CEO on industry, pilots, updates shares)
By Victoria Bryan
BERLIN, Oct 30 (Reuters) - Germany's Lufthansa haslowered its profit guidance for 2015 for the second time thisyear due to a stuttering global economy and increasedcompetition, hitting its shares and sending shivers throughother airline stocks.
The airline's chief executive also said he would stand firmin a row with pilots over early retirement benefits and low-costexpansion, even after eight walkouts by staff this year wiped160 million euros off operating profit.
Europe's largest airline by revenue reported higher thanexpected third-quarter results but said it expected its 2015operating profit to be only "significantly above" the 1 billioneuros ($1.3 billion) seen for 2014, compared with a previousforecast for 2 billion.
Before Thursday's warning, analysts had on average predictedoperating profit of 952 million euros for 2014 and 1.5 billionin 2015, according to a Reuters poll.
"These are tense times for the air industry and tense timesfor Lufthansa," Chief Executive Carsten Spohr told analysts andjournalists, citing risks from Ebola and a weaker economicoutlook for next year as well as the dispute with pilots.
The airline, which is expanding low-cost operations andreducing costs to better compete with budget carriers and Gulfrivals, is also being affected by inflation in pension costs,swings in oil prices and foreign exchange rates.
Weak European currencies mean airlines in the region areseeing less immediate benefit from falling fuel prices thantheir rivals in the United States.
Some analysts have also noted falling oil prices canindicate a period of weak yields, a key measure of pricing forairlines, because a drop in the price of crude is oftenlinked to a weakening of the global economy.
Lufthansa shares were down 6.6 percent at 1125 GMT, thebiggest losers in the benchmark DAX index. AirFrance-KLM was down 3 percent and British Airwaysparent IAG, which reports results on Friday, was down1.8 percent.
YIELD PRESSURE
Analyst Robin Byde at brokerage Cantor Fitzgerald said giventhat airlines should benefit from reduced fuel costs next year,the lowered guidance is likely related to airlines adding moreseats on long-haul routes and the resulting pressure on yieldsas they lower tickets prices to try and fill planes.
Chief Financial Officer Simone Menne said yields would bestable rather than higher in 2015 and Lufthansa would raise thenumber of seats it offers by 3 percent rather than 5 percent.
Yields fell a currency-adjusted 3.9 percent in the latestquarter, after a drop of 2.6 percent in the previous quarter,and were especially under pressure in North America and Asia.
Strikes by pilots and other staff this year have costLufthansa around 170 million euros. Chief Financial OfficerSimone Menne said any further pilot strikes in November andDecember could affect its 2014 guidance.
Pilots' union Vereinigung Cockpit has held eight walkouts sofar this year in a dispute over early retirement benefits. Thetwo sides have agreed to use a mediator and are meeting thisweek, although the union, which is also opposed to efforts toexpand low-cost operations, has not ruled out further strikes.
Spohr said he would remain firm and the airline would notallow the dispute to stop it expanding low-cost operations.
"I am confident that Vereinigung Cockpit will sooner orlater realise that their current attitude does more harm thangood," he said. "We will move on with structural changes evenwithout agreement."
He said Lufthansa would use other pilots from within thegroup that are not on expensive collective labour agreements tostaff tourist routes, where the brand, which usually focuses onbusiness travellers, is trying to reduce costs.
"I please my employees by running a profitable airline," headded when asked what he would do to appease the pilots.
Air France-KLM is having similar problems with its pilotsand has said a two-week strike and weakening demand will wipe500 million euros off profit in 2014.
Lufthansa's third-quarter operating profit of 735 millioneuros on sales of 8.46 billion beat average analyst forecasts of709 million and 8.26 billion in a Reuters poll.
Shares in Lufthansa have lost 15 percent of their value overthe last three months amid strikes and Ebola concerns. Theytrade at 6.2 times expected earnings, compared with 12.2 for AirFrance-KLM, 9.0 for British Airways-owner IAG, 11.5 for easyJet and 13.8 for Ryanair.
($1 US dollar = 0.7937 euro) (Editing by Maria Sheahan and David Holmes)
