The International Air Transport Association cut its projections for losses in the troubled airline industry this year nearly in half, saying improvements around the world are bringing "new optimism" to air carriers.

IATA is still projecting the airlines as a group will lose $2.2 billion this year, but the new forecast released Wednesday is down from a $4.3 billion loss the global association had earlier predicted. IATA predicts the industry as a whole will return to profitability next year for the first time since 2000 with earnings of $7.2 billion.

IATA Director General Giovanni Bisignani told the Wings Club of New York on Wednesday that IATA projects Asia carriers will have a $2 billion profit this year and European carriers will make about $1.4 billion. Continuing troubles in the United States, where several airlines are struggling through bankruptcy protection, will leave North American airlines $5.4 billion in the red, he said, about half the $10.8 billion loss the carriers compiled in 2005.

The revised forecasts are based on crude oil prices of $57 per barrel in 2006 and $52 per barrel in 2007. "Oil remains the single biggest challenge for airline profitability. Strong demand gives little hope of reduced prices this year," said Bisignani.