Airlines are growing more confident as economic recovery takes hold, with financial performance at pre-crisis levels and expectations of future profitability rising, airline association Iata said on Tuesday.

Almost 70 percent of respondents reported making money during the last quarter and a similar proportion expect further improvement over the year ahead, Iata's quarterly business confidence survey for July showed.

In the last survey in April, 57 per cent of respondents reported profitability over the previous quarter and two thirds forecast a further improvement.

Iata, whose 230 members include Lufthansa, Gulf and Singapore Airlines, in June revised its own forecast for 2010 industry financial performance to a profit of $2.5 billion from a loss of $2.8 billion.

The sharp improvement in cargo and passenger demand seen in early 2010 continued in the second quarter, Iata said.

More than 80 per cent of respondents reported rises in passenger demand, with similar rises for cargo.

But just over a quarter of respondents now indicate that cargo traffic growth may moderate over the coming 12 months, suggesting that the restocking phase of the recovery is coming to a close, it said. – Reuters