NEW YORK, Nov 19 (Reuters) - The chief executive of Deutsche Lufthansa AG, Germany's national flag-carrier, expressed frustration on Wednesday over the United States' restrictions on foreign ownership of airlines.

Lufthansa holds a 19 percent stake in JetBlue Airways Corp , but the U.S. Congress has resisted pressure to lift a 25 percent cap on foreign ownership of U.S. airlines.

"Yes, we would have loved to do more (with JetBlue) but we are limited," Lufthansa Chief Executive Wolfgang Mayrhuber said in New York.

Asked if Lufthansa expected to ever increase its stake in JetBlue, Mayrhuber said: "We leave it open. That's the current regulation -- nobody should be afraid of foreign direct investment."

Mayrhuber said a lot of investments by American companies around the world were not limited and that fresh capital would be of benefit to the United States.

European airlines have been hoping the second stage of the U.S.-EU Open Skies agreement, now under discussion, would force the United States to lift foreign ownership restrictions on its airlines by 2010.

President George W. Bush supported that goal, but U.S. labor groups and Democrats have opposed the idea, fearing it would mean job losses for financially weak U.S. airlines.

Mayrhuber said the United States was the driver of foreign direct investment around the world and benefited a lot from it, so it was curious it placed restrictions on foreign investment in U.S. airlines.

"It does not mean we have a lot of cash and want to buy everything here, but it's curious -- we can re-regulate or stay where we are and not move at all," said Mayrhuber, who spoke at a Yale Club luncheon and afterward to reporters.

"If we believe this is a global industry ... why should we then limit ourselves in areas like ownership?" he asked.

Asked if Lufthansa is considering investing in another U.S. airline, Mayrhuber replied: "Not at the moment."

Lufthansa has been leading the pack in European airline consolidation and is currently the exclusive bidder for state-controlled, loss-making Austrian Airlines. A deal is expected within a month.

"It's no secret we talked to them and put an offer in," Mayrhuber said.

But he added: "We will only be interested if we have a fair share of the debt... we would be willing to do it, but we will not take all the baggage." Lufthansa is demanding that it assume only half of Austrian Airlines' 900 million euros debt.

Asked if Lufthansa was still interested in a tie-up with Italian carrier Alitalia, Mayrhuber said: "They make the decision, not us."

The Italian government said on Wednesday it agreed to sell Alitalia's assets to a group of Italian businessmen at a sweetened price.

Alitalia's best assets will be sold to the CAI consortium for 1.052 billion euros ($1.33 billion) including debt.

A slimmer Alitalia is expected to be launched next month and CAI is also expected to pick either Air France-KLM or Lufthansa as a foreign partner to give Alitalia operational backing and buy a 20 percent stake in the airline.

Copyright Thomson Reuters 2008. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

This is cache, read story here