A global airline association is forecasting the industry's earnings to drop 29 percent next year amid weak European demand and higher costs.

International Air Transport Association Chief Executive Tony Tyler told reporters Tuesday, September 20, in Singapore that the industry's earnings will likely fall to $4.9 billion in 2012 from $6.9 billion this year.

Tyler said IATA expects revenue to rise to $632 billion next year from $594 billion this year while costs jump to $620 billion from $579 billion.

Tyler said profits for European carriers will likely plunge to $300 million next year from $1.4 billion this year as the region's debt crisis weighs on demand for travel, the Associated Press reported.