BANGKOK, March 19 (Reuters) – Loss-making subway operator Bangkok Metro Pcl. said it expects core earnings to be positive for the first time since beginning operations in 2004, signalling a rise in passenger traffic and sending its shares up.

Bangkok Metro, which runs a 20-km (12 mile) underground train system, expects growing demand for mass transit in the sprawling city of 15 million people with the opening of an airport rail link this year and plans for new shopping malls and condominiums.

That should boost revenue 10 percent rise and help the operator narrow its net loss to about 1 billion baht ($31 million) this year, in line with analysts' forecasts, Managing Director Sombat Kitjalaksana told Reuters in an interview.

''We're very optimistic because the overall economy is improving,'' he said.

Bangkok Metro, which is known as BMCL, reported a net loss of 1.33 billion baht last year and a 1.46 billion baht loss in 2008. Earnings before interest, tax, depreciation and amortization (EBITDA) were negative at about 200 million baht last year.

''We are confident that EBITDA will be positive this year,'' said Sombat, an engineering Ph.D graduate of Austria's University of Innsbruck. ''Losses will be lower this year, while we continue to control costs.''

Against regional peers it also looks cheap, trading at 2.1 times price per book, compared with 4.1 for Singapore subway operator SMRT Corp. Ltd., according to earnings tracker Thomson Reuters I/B/E/S.

Awarded a 25-year contract to operate the nearly $3-billion city subway, BMCL was expected to make profit in 2013 when Bangkok's 36 billion baht ($1.1 billion) ''purple line'' mass transit line begins operations, Sombat said.

Although the number of passengers fell to 190,000 late last week as protesters began arriving in Bangkok for anti-government rallies, daily passenger numbers were expected to rise to an average of  230,000 during weekdays in 2010, Sombat said.

That compares with below 200,000 last year.

''The better economic situation encourages commuters to use our service several times a day,'' he said, adding BMCL will stop offering fare discounts in July, which should help revenues.

Only 6 percent of Bangkok commuters use the mass transit system, compared with more than 30 percent in Hong Kong and Singapore, but that is expected to change.