Only a month ago, there was much talk of airlines going out of business.  The ash cloud from the Eyjafjallajoekull volcano in Iceland shut down travel through much of Europe after the global recession had already cut deep into revenue.  But now the International Air Transport Association (IATA) is releasing update projections for 2010, and they show the airline industry turning a profit this year.  Here's a look at the change in projections from March to June, from the IATA report:

Not that the ash cloud has had no long term effect.  The IATA  projects profits for every region except Europe, where the projections show $2.8 billion in losses this year (adjusted down from a projected $2.2 billion in March).  

In his State of the Air Transport Industry speech yesterday, IATA Director General Giovanni Bisignani said that global air traffic had returned to pre-recession levels, and that there was much reason for "cautious optimism."  But he called on industry members and government bodies to work together to make air traffic, as a business, more sustainable--pointing to 0.5% profit margins as too low.  

We overcame challenges with change and we have the passion and commitment to build a sustainable future. But we cannot build that future alone. The changes we need are not always within our control. Governments over-regulate our business and under-appreciate our role. Who can change the attitude of governments? Voters. The same voters that are our customers. Today, we have 2.4 billion potential industry advocates and the number is growing rapidly. To turn them into real activists, we must improve our industry’s value proposition: price, speed and quality. We have the price right. Flying today is 40% (36) cheaper  than before deregulation (37). We made travel more accessible but speed and quality suffered. Infrastructure has not kept pace and the result is queues on the ground and delays in the air.  And new security processes have created new hassles even as we are Simplifying the Business.

Now, our challenge is to gain the support of our customers to hold governments accountable for their actions. Can we do it? Yes we can. But it means facing the future with the courage to change. My 2050 vision for aviation is built on four cornerstones:  profitability, infrastructure, a new energy source and the customer. 

He does seem to bank a lot on customers feeling pleased with airlines these days.  Read Bisignani's full speech here.