GENEVA (

TheStreet

) -- The International Air Transport Association revised its financial outlook for 2010 and now expects airlines to report $5.6 billion in losses as compared to earlier loss forecasts of $3.8 billion.

IATA maintained its forecast of $11 billion in net losses during 2009.

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IATA said in 2010 air passenger traffic will return to its 2007 peak and air cargo demand also would rebound as depleted inventories are restocked. However, the authority expects high fuel costs and low yields will likely contribute to mounting losses.

"The worst is likely behind us. For 2010, some key statistics are moving in the right direction. Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3%," said Giovanni Bisignani, IATA's director general and CEO in a statement Tuesday.

But Bisignani added that "airlines will remain firmly in the red in 2010."

Industry revenue is expected to rise 4.9% year on year to $478 billion in 2010. While cargo yields are expected to improve by 0.9% in 2010, passenger yields aren't expected to improve from their extraordinary low levels, IATA said.

An average oil price of $75 a barrel is expected in 2010, up considerably from the $61.80 average expected for 2009, IATA said.