The global airline industry will lose $5.6 billion US in 2010, an industry group predicted Tuesday.

The International Air Transport Association described low revenues and rising costs as a "continuing disaster" for world airlines, despite some recovery in passenger and cargo traffic.

IATA expects worldwide air cargo demand to rise seven per cent next year. (Dave Simms/CBC)

It estimates its 240 member airlines have already lost $49 billion since 2000 and repeated its prediction that industry losses this year will add up to $11 billion.

"The worst is likely behind us," said IATA chief executive Giovanni Bisignani. "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."

IATA said passenger traffic fell 4.1 per cent in 2009, from the already-low level reached in 2008 when financial markets collapsed, and premium fares fell the hardest. Cargo traffic, meanwhile, declined 13 per cent.

The association estimates U.S. carriers lost $2.9 billion in 2009.

European airlines and Asia-Pacific carriers both lost around $3.5 billion, while the Middle East fared somewhat better, with a negative result of $1.2 billion. Latin America was the only region in the black in 2009 and is expected to be the sole profit-maker again next year.

IATA said it expects passenger traffic to bounce back by 4.5 per cent in 2010, with nearly 2.3 billion people travelling. Cargo demand is predicted to rise by seven per cent, but remain significantly below the peak of about 42 million tonnes in 2007.

Bisignani said the big carriers are healthier now as a result of $38 billion in cash they have raised this year. Still, carrier debts total $220 billion and regional carriers may be in trouble.

Thirty airlines failed this year.

"I don't see the threat of major bankruptcies, but smaller airlines [will] have difficulty accessing credit," he said. "As a result, they are fragile."

With files from The Associated Press