Airline Expectations, Except In Europe, Reverse Course

The fortunes of global airlines have flipped, said the International Air Transport Association, whose latest forecast released today shows the industry pulling in $2.5 billion in profits this year, compared with the previously predicted $2.8 billion in losses.

IATA said traffic and pricing improvements, buoyed by a global economic recovery, are lifting expectations, though European carriers remain absent from the association's profitability projections. Battered by volcanic ash, a "currency crisis" and labor woes, carriers in that region are expected to bleed $2.8 billion this year, making Europe the only continent whose carriers will remain in the red, IATA said.

"The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated," said IATA director general and CEO Giovanni Bisignani. "Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black."

North American carriers are expected to count $1.9 billion in profits this year, from a previously expected $1.8 billion in losses, thanks to economic growth, airline efficiencies and capacity discipline.