Lufthansa CEO sees sector growth buoyed by pickup in travel demand

Sees Japan re-opening, business travel bolstering sector

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Says war in Ukraine, inflation may dampen pace of growth

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"There is no reason for pessimism" - Lufthansa CEO

FRANKFURT, Oct 14 (Reuters) - The re-opening of Japan to tourists and a rise in demand for business travel will keep the aviation sector growing, Lufthansa's chief executive said, though the war in Ukraine, inflation and recession may dampen the pace of growth.

"There is no reason for pessimism," Carsten Spohr said on Friday, adding he also expects China to gradually re-open following its Communist Party Congress, which kicks off on Sunday.

Spohr's comments echoed upbeat forecasts by rivals IAG , owner of British Airways, Europe's biggest airline Ryanair and easyJet, which said this week that demand for travel was holding up.

In Europe, most airline stocks have plunged over the last six months, some by as much as 50%, over worries that rising household bills will dampen appetite for travel.

Lufthansa expects to reach 87% of its pre-pandemic capacity in 2023 after 75% this year, he said, adding that some 86% of seats on the German flagship carrier's planes were now filled.

Supply chain ructions that are forcing companies to find new suppliers is boosting demand for higher-margin business travel, he said, after a COVID-induced hiatus.

"We have finally left the crisis behind, after two and a half years," Spohr said.

Lufthansa said in August it expects to return to group operating profit this year as demand for short-haul flights in Europe drives growth at its passenger airlines. (Reporting by Ilona Wissenbach, Writing by Rachel More and Maria Sheahan, Editing by Miranda Murray and David Evans)