Lufthansa orders 10 Airbus planes

FRANKFURT, Germany (CNN) -- Deutsche Lufthansa, Europe's second-largest airline, has ordered 10 Airbus A330-300 planes amid increased confidence about the rest of the year.

Each plane is worth about $147 million, based on Airbus's catalogue prices, valuing the deal at about $1.5 billion. But airlines have been able to get huge discounts on price as global travel struggles to recover from the impact of the September 11 attacks on the United States.

Lufthansa (FLHA), along with is rivals British Airways (BAY) and KLM of the Netherlands, have grounded planes and cut costs -- mainly through job losses -- in order to keep planes in the air as passenger numbers plunged by about a third in the wake of the attacks.

Airlines have only seen a patchy recovery in passenger travel since the end of last year and Lufthansa expects the effects of September 11 to be erased by 2004. Germany's biggest airline grounded 43 aircraft after the attack and plans to reactivate 18 during the summer season as holiday traffic picks up.

Now, the airline expects to make an operating profit of 500 million euros ($494 million in 2002, up from the previous estimate of 400 million euros, the company told CNN, confirming comments made by its Chief Financial Officer Karl-Ludwig Kley to a German newspaper on Wednesday.

"If today were the annual general meeting, then we would say 500 million euros," Kley said, adding he viewed the airline's business development with growing confidence

The airline posted 12 million euro first-quarter operating profit last month but traffic is still down on last year. It will report results for the first-six months of this year on August 21, the company said.

The airline already operates Airbus A340-300 long-range jets and has a much larger a340-600 on order. In December, it ordered 15-Airbus double-deck A380 superjumbos.

The A330-300, which first entered service in early 1994, typically seats 335 passengers in two classes or 295 passengers in three classes and can fly up to 5,600 nautical miles (10,400 km). The ten aircraft will be delivered between 2004 and 2005.

Lufthansa's stock soared 5.9 percent to 12.65 euros on it improved outlook, while European Aeronautic Defence & Space Co (PEAD), which owns 80 percent of Airbus, gained 1.1 percent to 15.95 euros.