Airlines will globally return to profit in 2007, Giovanni Bisignani, director general of the International Air Transport Association (IATA), said.
He said the association expects airlines to lose $2.2bn this year but make a surplus of $7.2bn next year. That would be their first profitable year since 2001.
Since that year, the industry has suffered accumulated losses of $43.6bn.
Mr Bisignani, speaking in New York, said there was "a new cautious optimism emerging in the industry" due to improved economic prospects in Europe and Asia and an improving situation in the US.
Revised forecasts showed that the price of oil was likely to drop from $57 a barrel this year to $52 in 2007.
But Mr Bisignani said: "Oil remains the single biggest challenge for airline profitability. Strong demand gives little hope of significantly reduced prices this year."
But he predicted tough times for European carriers with a drop in profits from $1.8bn in 2005 to $1.4bn in 2006.
"Consolidation and strong fuel hedging programmes supported profitability. The higher price of fuel will hit them harder in 2006," he said.
London hotels see 8.5% rise in rooms yield
London hotels saw an 8.5% rise in rooms yield in February according to the latest figures form hotel consultants PKF.
Average daily room occupancy rose by 5.6% from 72.8% in February to 2005 to 76.9% and room rates rose by 2.8% to £106.87. The average daily rooms yield went up from £75.77 to £82.23.
Robert Barnard, a PKF partner, said: "Despite it being the coldest February for ten years, London hoteliers had a good month building on the cracking start to 2006. Rooms yield in the capital after just two months is now 9.2% up on last year."