GENEVA - Airlines outside Europe inched back into profit in the third quarter, but the industry remains on track for a net loss of $11 billion this year, the International Air Transport Association (IATA) said on Tuesday.

A sample of 75 major airlines reported a combined net profit of $0.7 billion in the third quarter compared with a $3.4 billion loss in the third quarter of 2008, IATA said in its Airlines Financial Monitor for October-November.

IATA said its previously forecast net loss of $11 billion in 2009 still looks likely. It has also forecast that the sector will lose $4 billion on a net basis in 2010.

Passenger demand for air travel rose in October but freight demand continued to fall, especially in Europe, indicating the global economic recovery remains fragile, IATA had said on Monday.

Passenger travel and freight volumes have now regained levels last seen at the start of the collapse a year ago, but remain below levels of early 2008, the Geneva-based body said.

Both markets have only recovered half the loss suffered during 2008, it said. The direction is positive but there is still a long way to go.

Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories.

IATA represents 230 airlines including British Airways, Qantas, United Airlines and Cathay Pacific.

(Reporting by Stephanie Nebehay; editing by John Stonestreet)

Qantas