WRAPUP 2-Price pressures ground airline sector recovery hopes
* Lufthansa says volumes not offsetting falling prices
* Airline yields still a disaster, costs rising - IATA
* Finnair expects to post further losses in rest of year
* Aeroflot net profit falls five-fold, no H2 outlook
* Japan Airlines seeking "huge" government bailout (Adds Aeroflot Q3 results; updates shares)
FRANKFURT, Oct 29 (Reuters) - Germany's Lufthansa (LHAG.DE) and the airline industry's representative body provided a gloomy outlook for the sector as carriers around the world struggled to make a profit amid a fierce battle for business.
"Initial signs of a stabilisation in volumes are far away from making up for the enormous and unrelenting pressure stemming from the massive fall in price levels," the German flagship carrier said on Thursday. [ID:nLS501235]
Industry body IATA echoed Lufthansa's warning, saying it was still too early to talk about a recovery. IATA has said it sees the world's airlines losing $11 billion this year as consumers tightened their purse strings and companies cut travel budgets.
"The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising," IATA said. [ID:nLT249034]
Airlines around the world have been crippled by a toxic mixture of reduced spending on travel, a drop in global trade and rising oil prices. To cut their bloated cost bases, many have grounded planes and cancelled or deferred plane orders.
Lufthansa has rescheduled some aircraft deliveries to save 1 billion euros ($1.5 billion) over the next three years. Plane makers Boeing (BA.N) and Airbus (EAD.PA) are headed for their worst annual order tally in at least 15 years.
Demand has suffered especially this year in the highly profitable business class segment as companies ask staff to book cheaper seats.
Finnish national carrier Finnair (FIA1S.HE) said earlier that it saw third-quarter sales fall sharply due to declining demand for business travel, adding it would continue to make losses during the rest of the year. [ID:nLS157770]
Russian flagship carrier Aeroflot (AFLT.MM) said its first-half net profit fell five-fold to $14.4 million as lower passenger numbers hit revenue, which fell 30 percent to $1.46 billion. The airline said lower jet fuel prices pushed up its margins on pretax earnings to 12 percent from 10 percent.
Aeroflot gave no outlook for the second half but analysts said they expected performance to improve only slightly as better sales from renewed passenger growth at the airline is offset by rising fuel costs. Continued...
