A global aviation group has dramatically increased its estimate for worldwide airline profits this year, citing an increase in passenger demand.

The International Air Transport Association said Tuesday it expects airlines to earn $6.9 billion in 2011, compared to an earlier estimate of just $4 billion. However it forecast earnings to fall back to $4.9 billion next year because of deteriorating economic conditions.

The IATA says it now expects an increase of almost six percent in passenger traffic this year, up from an earlier forecast of 4.4 percent. The group expects Asian carriers to post a net profit of $2.5 billion, with U.S. airlines earning $1.5 billion and European carriers taking in $1.4 billion.

IATA chief executive Tony Tyler told reporters in Singapore that any profit for the industry this year was a great achievement, “given the strong head winds” of high oil prices and a weak global economy.

But Tyler said the aviation industry is likely headed for “another year in the doldrums” in 2012 as a result of the continued debt crisis in Britain and the U.S. He said profits for European carriers will likely plunge to $1.4 billion.

The industry earned $16 billion in 2010.