Airline industry group IATA warned on Monday, June 11, global profits would more than halve this year owing to surging oil prices and the eurozone crisis, with European carriers suffering losses of $1.1 billion, AFP reports.

The head of International Air Transport Association, Tony Tyler, also hit out at a controversial carbon tax scheme put in place by the European Union, lashing it as a "polarizing obstacle to real progress".

Tyler told the group's annual general meeting in Beijing that "2012 is another challenging year. We expect revenues of $631 billion but a profit of just $3.0 billion".

That compares with a profit of $7.9 billion in 2011, IATA figures show.

Tyler cited cost of oil as one of the main reasons for "anaemic global profitability" -- with the industry group expecting an average of $110 a barrel this year -- and warned volatile political situations could push up prices.

But he added: "The biggest and most immediate risk ... is the crisis in the eurozone. If it evolves into a banking crisis we could face a continent-wide recession, dragging the rest of the world and our profits down."

In a statement released as the AGM began Monday, IATA said it had downgraded its outlook for European airlines in 2012, projecting losses of $1.1 billion compared with its previous forecast of $600 million in losses.

The estimate comes despite figures showing 5.6 percent year on year growth in European passenger traffic in April.