UPDATE 2-Lufthansa's growth plans clipped by plane delivery delays

* 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 cutits growth plans for the year citing a lack of planes and crewafter reporting a 70-percent jump in profit for 2017 onThursday.

The German airline group plans to increase capacity by 9.5percent this year, down from plans in January for a 12 percentincrease.

Lufthansa has seen delays to deliveries of the AirbusA320neo plane, following engine problems at maker Pratt& Whitney.

It has 10 A320neos in its fleet compared to expectations for20. There have also been delays to deliveries of the BombardierCSeries.

Like other carriers such as easyJet, Lufthansa isseeking to fill the gap left in the German market by thecollapse of Air Berlin last year.

Lufthansa gave up a plan to acquire leisure carrier Nikifrom Air Berlin due to competition concerns and is insteadexpanding its Eurowings budget unit.

However, retraining crews takes time and with other carriersexpanding, there is little spare capacity in the marketavailable to rent via wet leases.

"We have a nice problem - too many passengers and too fewplanes," Chief Executive Carsten Spohr said.

Lufthansa is in final talks with Niki Lauda on leasingcrewed planes from his Laudamotion airline, Spohr said.

Former racing driver Lauda bought Niki, the airline hefounded, after Lufthansa dropped its bid.

Lufthansa reported 2017 adjusted earnings before interestand tax of 2.97 billion euros ($3.67 billion), topping the 2.84billion euros expected by analysts in a Reuters poll.

That marked a third record year in a row but Lufthansaexpects profits to slip this year due to fuel price increases.

The group's shares, which have lost almost 15 percent thisyear after more than doubling over the course of 2017, were up1.8 percent in morning trading, making them the second biggestgainer on the DAX.

Lufthansa said it expected stable pricing this year and thatso far it was "slightly positive" in the first quarter and thefirst half of 2018.

Unit revenues - a measure of pricing - rose 1.9 percent in2017, and were up 2.3 percent in the fourth quarter.

Reflecting the improved results, Lufthansa said it plans toincrease its dividend to a better than expected 0.80 euros pershare. It said it would aim to keep the payout at that level orhigher in the coming years.

($1 = 0.8083 euros)(Reporting by Victoria Bryan and Sabine WollrabEditing by Maria Sheahan and Douglas Busvie)