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Airlines around the world should make a return to collective profitability by the end of the year, according to the International Air Transport Association (IATA).
However, European carriers are still lagging behind other global regions and growth of profit is expected to slow next year, IATA statistics have revealed
In June the Association predicted a $2.5 billion profit for carriers in 2010, but this has been revised to a projected $8.9 billion But profitability was expected to drop to $5.3 billion next year.
"The industry recovery has been stronger and faster than anyone predicted," said Giovanni Bisignani, IATA's director general and chief executive.
"The $8.9 billion profit that we are projecting will start to recoup the nearly $50 billion lost over the previous decade. But a reality check is in order.
"There are lingering doubts about how long this cyclical upturn will last. Even if it is sustainable, the profit margins that we operate on are so razor thin that even increasing profits 3.5 times only generates a 1.6% margin.
"This is below the 2.5% margin of the previous cycle peak in 2007 and far below what it would take just to cover our cost of capital."
The association said the improved outlook for 2010 was driven increasing demand and disciplined capacity management, stronger yields pushing revenues higher and a stable cost base.
IATA said Europe's carriers profitability would improve from a $2.8 billion loss to a $1.3 billion loss.
The Middle East, Latin American and Asia Pacific were all showing positive signs of growth thanks to a recent surge in business and premium traffic.
But Bisignani said this year would be "as good as it gets" in terms of the current economic cycle.
"Governments are running out of cash for pump priming," he said.
"Unemployment remains high and business confidence is weakening. And we expect the 3.2% GDP growth of 2010 to drop to 2.6% in 2011.
"As a result, 2011 is looking more austere. We see profitability falling to $5.3 billion with a margin of 0.9%.