SINGAPORE, Nov. 13 (Reuters) – Singapore Airlines (SIA), the world's biggest airline by market value, has not given up hope of making a profit this financial year as it sees a recovery in premium-class bookings, its CEO said.

The airline, which said three months ago that it might post its first full-year loss if business conditions did not improve, said it has seen some recovery in business class bookings as banks relax restriction on business travels.

Singapore Airlines reported on Tuesday a worse-than-expected quarterly loss as the global economic slowdown hit margins, but the airline said the outlook has improved.

It reported a net loss of S$159 million ($114.6 million) compared with a net profit of S$324 million a year ago, following a net loss of more than S$300 million in the first quarter of this financial year.

''We are seeing a definitive pickup in bookings in business class. Banks have started to relax the rules on travel for their executives, so we started to see bankers in suits back in business class and first class,'' SIA Chief Executive Chew Choon Seng said at a media briefing.

He said the airline has reduced its fuel hedging to 22 percent of its fuel needs by the end of October from over 30 percent, as it sees oil prices staying at around current levels.

SIA, like any other premium airlines, has seen falling passenger and cargo demand this year as a global recession hurt business and leisure travel, forcing it to reduce capacity by 11 percent for the fiscal year starting April.

The airline has also cut staff salaries and working hours.
Chew said the Singapore flag carrier, 55 percent-owned by state investor Temasek Holdings, has no plans to cut its capacity further and would reinstate routes that it had cut previously.

He said the company would now focus on generating yields instead of gaining market share.