UPDATE 1-Lufthansa Cargo eyes 5 pct growth in 2014 after flat 2013
* Exec sees 5 pct growth, wants to outperform market
* Exec says pick-up started at end of 2013
* 4 MD-11s to be taken out of service as new planes arrive
FRANKFURT, Jan 31 (Reuters) - Lufthansa Cargo, the freight division of Germany's largest airline Lufthansa, expects it will return to growth in cargo volumes this year as the world economy picks up, an executive said.
The company forecasts global growth in freight tonnage of around 4 percent and expects it will outperfom the market, with its own tonnage rising 5 percent.
Lufthansa Cargo saw volumes drop 1 percent in 2013 as an expected recovery in the second half of the year did not materialise and it predicts 2013 operating profit of under 100 million euros ($135.6 million), compared with 104 million euros in 2012.
"At the end of 2013, we can see growth and in the first couple of days and weeks in 2014 we have seen a continuation of that trend and hope we can keep it going," sales chief Andreas Otto told journalists at an event late on Thursday.
For example, he said that Lufthansa Cargo's volumes out of China had risen 25 percent in the last weeks of 2013 and those out of Germany had been up around 10 percent.
The IMF earlier this month raised its global growth forecast for the first time in nearly two years, saying it now predicts the world economy will grow by 3.7 percent in 2014.
Still, if a crisis flares up, freight markets could easily be derailed, Otto said, adding competition from sea freight and the cargo hold of passenger jets remained a problem.
The sector has seen volumes shift to sea freight, which takes longer to reach its destination but is cheaper.
Also, companies running dedicated freighter planes are competing with increased capacity on passenger services, as fast-growing carriers like Emirates and Turkish Airlines use the belly space on their passenger jets to transport goods.
Otto said that environment was making it difficult to operate cargo planes profitably. British Airways earlier this month cancelled a contract to lease three 747-8 freighters from Atlas Air, and Air France is retiring some of its freighters.
Lufthansa Cargo has ordered five new 777 freighters from Boeing, and a decision on whether to cancel, delay or exercise an option for a further five will be taken later this year, Otto said.
Four of the 777Fs will be in service by the middle of this year and will for now replace four older MD-11s, Otto said, which means Lufthansa's cargo fleet will then consist of four 777Fs and 14 MD-11s.
"If the industry picks up, we have the flexibility to put two of the MD-11s back into service," Otto said.