The International Air Transport Association (Iata), which represents 240 carriers, said that airlines were set to make a collective profit of $6.7bn (£4.15bn) in 2012, up from a previous forecast of $4.1bn.
For 2013, it predicted an industry profit of $8.4bn, up from its previous estimate of $7.5bn.
Following projections of a loss for in the October forecast, Iata now expects European airlines to break even, a decline of $400m from the 2011 figure.
African carriers are also expected to break even, with airlines across North America, the Middle East and Asia-Pacific regions all expected to increase profits.
Expectations for Latin America remain unchanged.
The airline association warned that macroeconomic risk – particularly the Eurozone crisis and the US fiscal cliff – remained a key threat to global performance.
“We need to make sure that cash strapped governments understand aviation is a catalyst for economic growth, and ensure that light touch regulation does not become a licence for infrastructure providers to let costs get out of control,” said Iata chief executive and director general Tony Tyler.
Tyler said the organisation would also maintain pressure on governments to invest in key infrastructure improvements.