GENEVA – Airlines will show better-than-expected earnings of $15.1 billion this year as investors favor shares of carriers in Asia, where travel is expected to grow strongly, the International Air Transport Association said Tuesday.

Based on its market value, Air China is now worth twice what investors are valuing either Delta in the US or Germany's Lufthansa, highlighting the industry's shift away from the US and Europe to higher-growth countries, IATA said.

IATA chief executive Giovanni Bisignani during a press conference in Geneva, Switzerland, Tuesday, Dec 14, 2010. The International Air Transport Association says airlines will see net profits of $15.1 billion in 2010 after better-than-expected economic recovery and strong growth in Asia. [Photo/Agencies]

"The world is changing in aviation, and it's changing very, very quickly," IATA Chief Executive Giovanni Bisignani told a news conference in Geneva. "Rapidly developing markets are shifting the industry's center of gravity to the East."

Air China has seen its market capitalization surge to $20 billion, followed by Singapore airlines with $14 billion and Hong Kong-based Cathay Pacific with $12 billion.

China Southern has a market cap of $11 billion, as does LATAM, the Latin American airline recently created from the merger of Chile's LAN and TAM of Brazil. US carrier Delta and Germany's Lufthansa follow with market capitalizations of $10 billion each.

By passenger miles flown - a common measure of airline size - Delta still ranks as the world's number one, followed by American Airlines and United, with Air China outside the top ten.

But burgeoning demand in the East will likely see Asian carriers rise up the table in terms of passenger miles too, especially if airlines there merge like US-based carriers have in recent year.

IATA said passenger traffic across Asia outstripped that of North America for the first time in 2009.

Together, the two regions are largely responsible for the industry's recovery this year, with weak economic conditions in Europe and low margins acting as the biggest drag on profits, the group said.

Airlines will see net profits of $15.1 billion in 2010, IATA said. This marks a massive turnaround from the $10 billion industry loss in 2009 and $16 billion loss in 2008.

Asian carriers will contribute $7.7 billion to the global total, while North American airlines will earn $5.1 billion. Europe, with estimated net profits of $400 million, lags behind the Middle East ($700 million)and Latin America ($1.2 billion). African carriers will earn $100 million this year, IATA said.

The full-year estimate also is a significant jump from IATA's prediction in September for an $8.9 billion industry profit in 2010.

"2011 is going to be a much more challenging period," said IATA chief economist Brian Pearce, noting that heavy debts and new taxes will weigh on consumer travel spending in Europe and North America.

IATA forecasts net profits of $9.1 billion for the industry next year.

Bisignani warned that profit margins remain "pathetically low" and pose a threat to the industry in case of another economic shock.

Recently introduced air travel taxes in Britain, Germany and Austria, and efforts to establish a regional carbon emissions trading market harm Europe's competitiveness, he said, noting that these further squeeze profit margins for the continent's carriers.

Fuel price rises are also expected to hit earnings in 2011, adding impetus to the industry's efforts to reduce kerosene consumption and find viable renewable alternatives.

Still, the Geneva-based group representing some 230 carriers and 93 percent of scheduled air traffic said the outlook is bright for Asia.

A rapidly expanding middle class in Asia and growing demand for air links between the continent's 15 mega-cities, with over 10 million inhabitants each, promise strong industry profits in the region, Bisignani said.

If "archaic ownership rules" in the United States were changed the industry might soon see the first takeover of a US carrier by an Asian airline, he added.

The Italian, who has been at the helm of IATA for nine years, will be succeeded by Cathay Pacific CEO Tony Tyler next year.