BERLIN (Reuters) - Germany's Lufthansa (>> Deutsche Lufthansa AG) has lowered its profit guidance for 2015 for the second time this year due to a stuttering global economy and increased competition, hitting its shares and sending shivers through other airline stocks.

The airline's chief executive also said he would stand firm in a row with pilots over early retirement benefits and low-cost expansion, even after eight walkouts by staff this year wiped 160 million euros off operating profit.

Europe's largest airline by revenue reported higher than expected third-quarter results but said it expected its 2015 operating profit to be only "significantly above" the 1 billion euros ($1.3 billion) seen for 2014, compared with a previous forecast for 2 billion.

Before Thursday's warning, analysts had on average predicted operating profit of 952 million euros for 2014 and 1.5 billion in 2015, according to a Reuters poll.

"These are tense times for the air industry and tense times for Lufthansa," Chief Executive Carsten Spohr told analysts and journalists, citing risks from Ebola and a weaker economic outlook for next year as well as the dispute with pilots.

The airline, which is expanding low-cost operations and reducing costs to better compete with budget carriers and Gulf rivals, is also being affected by inflation in pension costs, swings in oil prices and foreign exchange rates.

Weak European currencies mean airlines in the region are seeing less immediate benefit from falling fuel prices than their rivals in the United States.

Some analysts have also noted falling oil prices can indicate a period of weak yields, a key measure of pricing for airlines, because a drop in the price of crude is often linked to a weakening of the global economy.

Lufthansa shares were down 6.6 percent at 1125 GMT, the biggest losers in the benchmark DAX index <.GDAXI>. Air France-KLM (>> Air France-KLM) was down 3 percent and British Airways parent IAG (>> International Consolidated Airlines Grp), which reports results on Friday, was down 1.8 percent.

YIELD PRESSURE

Analyst Robin Byde at brokerage Cantor Fitzgerald said given that airlines should benefit from reduced fuel costs next year, the lowered guidance is likely related to airlines adding more seats on long-haul routes and the resulting pressure on yields as they lower tickets prices to try and fill planes.

Chief Financial Officer Simone Menne said yields would be stable rather than higher in 2015 and Lufthansa would raise the number of seats it offers by 3 percent rather than 5 percent.

Yields fell a currency-adjusted 3.9 percent in the latest quarter, after a drop of 2.6 percent in the previous quarter, and were especially under pressure in North America and Asia.

Strikes by pilots and other staff this year have cost Lufthansa around 170 million euros. Chief Financial Officer Simone Menne said any further pilot strikes in November and December could affect its 2014 guidance.

Pilots' union Vereinigung Cockpit has held eight walkouts so far this year in a dispute over early retirement benefits. The two sides have agreed to use a mediator and are meeting this week, although the union, which is also opposed to efforts to expand low-cost operations, has not ruled out further strikes.

Spohr said he would remain firm and the airline would not allow the dispute to stop it expanding low-cost operations.

"I am confident that Vereinigung Cockpit will sooner or later realise that their current attitude does more harm than good," he said. "We will move on with structural changes even without agreement."

He said Lufthansa would use other pilots from within the group that are not on expensive collective labour agreements to staff tourist routes, where the brand, which usually focuses on business travellers, is trying to reduce costs.

"I please my employees by running a profitable airline," he added when asked what he would do to appease the pilots.

Air France-KLM is having similar problems with its pilots and has said a two-week strike and weakening demand will wipe 500 million euros off profit in 2014.

Lufthansa's third-quarter operating profit of 735 million euros on sales of 8.46 billion beat average analyst forecasts of 709 million and 8.26 billion in a Reuters poll.

Shares in Lufthansa have lost 15 percent of their value over the last three months amid strikes and Ebola concerns. They trade at 6.2 times expected earnings, compared with 12.2 for Air France-KLM, 9.0 for British Airways-owner IAG, 11.5 for easyJet (>> easyJet plc) and 13.8 for Ryanair (>> Ryanair Holdings plc).

($1 US dollar = 0.7937 euro)

(Editing by Maria Sheahan and David Holmes)

By Victoria Bryan