Lufthansa is aiming to increase operating profit by 1.5 billion euros compared with 2011 via the Score restructuring programme, which includes measures such as expanding its Germanwings low-cost carrier and introducing a premium economy class on Lufthansa long-haul flights.

It said on Thursday that its Lufthansa and Germanwings carriers together increased reported operating profits by 240 million euros to 265 million euros in 2013 thanks to the programme.

"All business segments are profitable," Chief Financial Officer Simone Menne told journalists.

She said though that while the economy was improving, competition remained tough, meaning the improved results were mainly down to the Score programme.

Yields, a measure of pricing, fell 4 percent in the fourth quarter when unadjusted for currency effects and are expected to be negative in 2014, according to presentation slides.

Lufthansa swung to an operating profit of 36 million euros in the quarter on revenues of 7.26 billion euros. It said it would propose paying a dividend of 0.45 euros a share for 2013.

The company had been expected to report fourth-quarter operating profit of 13.7 million euros on revenues of 7.523 billion, according to a Reuters poll. The dividend was expected at 0.16 euros.

Lufthansa also on Thursday said it was changing the way it wrote down the value of its aircraft, with the depreciation period now 20 years instead of 12.

That will artificially boost profits, Menne said, meaning the overall target for operating profit for 2015 is now 2.65 billion euros, including the increase of 350 million euros from the new policy.

(Reporting by Victoria Bryan; Editing by Maria Sheahan and Sonya Hepinstall)