Singapore Airlines (SIA) said it would review capacity on some routes if the global credit squeeze continues to hurt the global economy, and warned rising fuel prices remained a major challenge.

'Fuel remains a very challenging factor for us. Of more concern is the credit market squeeze. The state of the global economy will have an influence on traffic flows,' SIA chief executive Chew Choon Seng said.

'We would have to crank in some flexibility in our forward plans in terms of capacity among various routes around the world.'

The airline, which last week raised fuel surcharges for passengers, planned to maintain its fuel hedging requirements at 40-60 per cent as crude oil prices threaten to hit $100 per barrel, he said.

Speaking ahead of a media event to showcase the airline's new Airbus A380, Chew said the airline had no immediate plans to order more of the superjumbos. The A380, the world's biggest airliner, completed its first commercial flight between Singapore and Sydney on Wednesday.

Chew said SIA expected to talk to Boeing in coming weeks about the delivery schedule of the new 787 Dreamliner, which has been hit with delays. He said SIA had not been notified of any further delays to the 787 Dreamliner so far.

SIA has another 18 A380s on order from Airbus to fly long-haul routes between Singapore, London, Tokyo and San Francisco from early 2008.

'She's a beauty,' Chew said of the giant aircraft parked in nearby and due to depart Sydney.

Chew said he welcomed Thursday's decision by the Malaysian government to allow AirAsia to fly between Malaysia and Singapore, provided there were opportunities for SIA.

'Provided there are reciprocal opportunities for both countries and Singapore Airlines itself does not have to trim back our current levels, we have nothing against opening up the bilaterals,' Chew said.

He said he expected there would be opportunities for its budget airline Tiger Airways to fly on the route, which is currently shares by Singapore Airlines and Malaysian Airline System.

But Chew said he did not plan to meet with Australian political leaders ahead of Nov 24 national elections to discuss liberalising routes between Australia and the US. Singapore Airlines wants access to the potentially-lucrative route dominated by Australia's national carrier Qantas Airways.

Chew later said high fuel prices may slow down the global economy.

He also talked down speculation Air China may try and block Singapore Airline's agreed purchase of a $918 million stake in China Eastern.

'The best of our knowledge it is not an issue for China Eastern. We are still proceeding with our project,' Chew said. Reuters