SINGAPORE (Reuters) - Singapore Airlines, the second biggest carrier by market value, saw passenger loads stabilise in April but said on Friday there were no signs demand would pick up in an industry reeling from fuel costs and flu worries.

Investors, sweetened by the firm's offer to hand out its stake in a food firm via dividends, shrugged off a collapse in fiscal fourth quarter profits to leave its shares unchanged, but saw a bearish outlook ahead.

"The main issue now is not swine flu but the recession. I believe that discounted airfares will continue for at least another six to nine months," said Roger Tan of SIAS Research.

"There may be a correction ahead for SIA."

Singapore Airlines said on Friday it filled 63.7 percent of the space available, down 3.8 percentage points from a year ago but up from 62.6 percent in March. It has slashed capacity and cut staff hours on falling passenger and cargo demand this year.

But it said it would not change its business model, which is geared more towards the premium travel sector, and would stick to this year's plan to take delivery of five Airbus A380-800 superjumbos and seven A330-300s despite the slowdown.

Its plans to expand into China are on hold in the short-term since it will not revive stalled talks over a investment in China Eastern Airlines, a move that would have given it access to the hottest growth market in aviation.

"We still maintain an interest in having the opportunity to participate in the airline investment in China. The immediate situation that we have before us, our hands are full, therefore it's not a burning priority," said CEO Chew Choon Seng said at a briefing on Friday.

Last year, Singapore Airlines, along with majority shareholder Temasek, offered US$920 million for a combined 24 percent stake in China Eastern, but the Chinese carrier's shareholders rejected the bid and it also faced strong opposition from Air China.

"It seems like they are losing market share, I think that's our key concern," said an airline analyst at a bank in Hong Kong, who declined to be identified.

"I think (China) would be a good idea, that's the fastest growing market."

Singapore Airlines on Thursday reported a 92 percent drop in net profit for its fiscal fourth quarter ended March, hit by the weak travel market and fuel hedging losses of about US$370 million dollars.

Many airlines increased their hedging of fuel costs when oil prices soared last year, but were burned, having locked in fuel supplies at over US$100 a barrel, when oil slid back to under US$50 this year.

Chew said the airline hedged only a quarter of its fuel requirements for the current 2009/10 financial year.