SINGAPORE ( TheStreet) -- The International Air Transport Association projects 2010 profits for the airline industry will come in at $8.9 billion, higher than its June forecast of $2.5 billion, but said profitability will fall next year.

"The industry recovery has been stronger and faster than anyone predicted. The $8.9 billion profit that we are projecting will start to recoup the nearly $50 billion lost over the previous decade," said Giovanni Bisignani, IATA's director general and CEO, in a statement Tuesday. "But a reality check is in order. There are lingering doubts about how long this cyclical upturn will last,"

IATA predicts global airline profits will fall to $5.3 billion in 2011.

IATA said the improved outlook for 2010 is being driven by "increasing demand and disciplined capacity management" leading to stronger yields which push revenue higher. Costs, meanwhile, remain relatively stable.

IATA said Asia is expected to lead growth in 2010 with a profit of $5.2 billion, while Europe will be the only region to lose money on "continuing economic weakness in the European economy and faltering consumer confidence" which depresses passenger traffic.

-- Written by Joseph Woelfel

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