GENEVA (AP) — Global aviation earnings will likely decline to $3.5 billion in 2012 but those could turn into steep losses exceeding $8.3 billion if the eurozone crisis veers toward catastrophe, the industry’s trade group said Wednesday.

For 2011, the industry says it anticipates that surging oil and fuel prices will clip its profits at $6.9 billion — less than half of its $15.8 billion in 2010 profits.

The International Air Transport Association’s annual review focused on Europe’s debt crisis that is threatening the global economy.

The Geneva-based trade group called the gloomy economic outlook — particularly weak European demand and higher costs — challenging for aviation throughout the world, despite strong growth in Asia.

For European airlines “the only open question is how deep” the losses will be next year, the association’s chief executive Tony Tyler told reporters in Geneva.

IATA, whose 240 member airlines carry 84 percent of all passengers and cargo, says the industry’s overall revenue in 2012 is expected to rise to $618 billion from $596 billion this year, while costs will go up from $583 billion to $609 billion. He said the projected 2012 operating profit of $8.7 billion would result in a net profit of $3.5 billion.

But European carriers will likely post losses of $600 million next year down from weak profits of $1 billion this year as the region’s debt crisis weighs on demand for travel, he said.

According to IATA figures, if the eurozone crisis turns into a full-blown banking crisis with a deep European recession the airlines could be expected to result in losses for carriers in Europe of $4.4 billion. Next would be North America, with $1.8 billion in losses, and the Asian-Pacific, with $1.1 billion in losses, the group says. The Middle East and Latin America could see $400 million in losses, it says, and Africa might incur $200 million in losses.

Global air freight markets already are shrinking, down 5 percent between May and October, and fuel prices are 30 percent higher than they were a year ago, said Brian Pearce, IATA’s chief economist.

“International trade has pretty much ground to a halt,” he said. “Freight is a very good signal for what’s going on in the economy. What it’s showing is that businesses have become very less confident.”

He said the industry’s overall financial outlook is based on expectations of European leaders “muddling through” to a solution, but if policy-makers get it wrong a full-blown banking crisis and European recession would have “some pretty serious consequences for the industry,” Pearce said.

“Our outlook is for the industry to come under further pressure whatever the economic scenario,” he added.