Aegean Airlines swings to Q1 profit as costs fall

* Aegean Airlines posts 4.6 million euros profit for Q1

* Cites drop in oil price, rise in passenger traffic

* Says decline in global demand to affect full-year revenues

ATHENS, May 27 (Reuters) - Greece's largest private airline, Aegean Airlines (AGNr.AT), reported on Wednesday a first-quarter net profit of 4.6 million euros ($6.41 million), citing cost cuts and a drop in fuel prices.

The company posted a 4.4 million euros loss in the same period last year.

This year's first quarter was helped by a 13 percent rise in revenues to 111.3 million euros, and increased passenger traffic, especially on its international network, the company said in a statement.

Aegean carried 1.2 million passengers in the first three months of the year, up 9 percent from the same period in 2008. Passengers on its domestic flights rose 4 percent in the first quarter and 20 percent in international routes.

Aegean said it expected a decline in demand in international markets to affect full-year revenues but that it was sticking to its business plan and taking measures to maintain its financial position.

"We remain cautious as to the impact of the current economic crisis and the evident decline in demand and yield pressure, especially in international markets, which will inevitably affect our revenue performance for the full year," Managing Director Dimitris Gerogiannis said in the statement.

The company said earlier this week that it will join the Star Alliance, which includes UAL Corp's United (UAUA.O), Germany's Lufthansa (LHAG.DE), Air Canada (ACa.TO) and Continental (CAL.N).

The move would give Aegean, which became Greece's largest airline by passenger numbers last year, access to many markets across the globe with large communities of Greek descendants, the company said.

Aegean has been renewing its fleet since going public in 2007. Its shares have gained 23.7 percent since the start of the year, underperforming the broader Greek market's .ATG 25 percent advance.

They trade eight times estimated earnings compared to a multiple of 22 for Lufthansa, according to Reuters Estimates data.

(Reporting by Renee Maltezou; Editing by Ingrid Melander and David Cowell)