The International Air Transport Association has announced that it expects the airline industry to show a profit of $2,5 billion in 2010.  That’s quite a turnaround from their earlier prediction of a $2.8 billion loss.

The Wall Street Journal reports the IATA says “passenger traffic is now expected to grow 7.1% this year and cargo volumes will grow by 18.5%, compared with its previous forecasts for 5.6% and 12% growth, respectively. Industry revenue is forecast at $545 billion, up from $483 billion in 2009.”

The numbers are not all good: IATA predicts that European air carriers will lose $2.8 billion this year, up from the earlier predicted loss of $2.2 billion. Those increased losses are blamed on everything from the economic downturn to labor strife to the grounding of flights due to volcanic ash from the Icelandic volcano with the unpronounceable name (Eyjafjallajokull).

Simple math says that if these numbers are accurate and European carriers show a $2,8 billion loss, then the rest of the world will show a very substantial profit of $5.3 billion. IATA earlier predicted that Asian carriers would make $900 million, they have now revised that to $2.2 billion.

The huge differences between IATA’s earlier predictions and their latest ones should give one pause: let’s wait until the end of the year to see if there will be any other wild swings in the market.

If the numbers are accurate, what do they mean for North American air travelers? Simple. If you were paying to check bags, you will continue to — that fee will not go away. Nor will the fee for a meal or a pillow or a blanket or a set of earphones.  The airlines have made a huge amount of money from those fees and will not drop them anytime soon. In the meantime, airfares will continue to rise.

The airlines have found that to be a winning combination, there is no reason to believe that profitability will cause them to lower airfares or fees.