Industry revenues are forecast to be $545 billion in 2010. This is up from the $483 billion in 2009, but still below the $564 billion achieved in 2008, the air travel industry body said.

"The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated. Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black," IATA's chief Giovanni Bisignani told the 66th IATA annual meeting and World Air Transport Summit.

"We thought that it would take at least three years to recover the $81 billion (14.3%) drop in revenues in 2009. But the $62 billion top line improvement this year puts us about 75% on the way to pre-crisis levels," he added.

But Bisignani cautioned that the $2.5 billion profit came with some important health warnings.

First, this represents a net margin of just 0.5%, which is a long way from sustainable profitability. Second, a major part of the global industry is still posting big losses.

A stagnating economy, strikes, natural disasters, and a currency crisis have left European carriers struggling and making the region the only one in the red.

Europe's anticipated $2.8 billion loss this year compares with the $2.2 billion loss forecast in March, although it is still better than the $4.3 billion that the region lost in 2009, IATA said.

GDP growth of 0.9% is not enough to support a recovery, and the currency crisis clouds the future. Moreover, 70% of the $1.8 billion loss in revenue as a result of the volcanic ash crisis was borne by European carriers.

A series of labor strikes and strike threats have also hit the region's performance, it said.

IATA said it maintained its expectation on fuel costs for an average annual oil price of $79/barrel (Brent) in 2010.

IATA represents 230 airlines which between them account for 93% of commercial air traffic.

--Weilyn Loo, weilyn_loo@platts.com