The global airline industry returned to profitability in 2010 after two years of financial losses. Driving this turnaround was the growth of passenger and cargo traffic, which had flat-lined over the previous two-year period. As a direct result, large turbine engine manufacturers have seen rebounding sales and full order books for new and existing engines.

Some larger operators are confident in their ability to return a profit during another year of belt-tightening, but mixed results are more likely.

After a remarkable recovery in 2010, global demand for airfreight stagnated in 2011, and the outlook for 2012 is for a continuation of sluggish growth conditions. Year-over-year cargo traffic volumes showed increases through the first four months of 2011, but turned negative in May, and as a result—when the full-year 2011 results are tallied—they are expected to show a slight decline versus the 2010 level.

When the FAA finally issued a new crew rest rule for U.S. pilots in December—one that has been decades in the making and could become a model for the rest of the world—something was very different from the proposed rule the agency published in September 2010: The cost.

Air France

The new year brings new challenges to India's suffering airline industry with signs of worse things to come. Amid the increasing debt crisis, mounting jet fuel costs, soaring losses and an inability to raise fares in a cut-throat market, airlines in India face the daunting task of protecting their air operator permits and convincing regulators that they meet safety standards at the same time as they are cutting costs.

Engine MRO will outpace the total commercial aviation maintenance, repair and overhaul market growth this year, largely because engine events are more expensive and because more powerplants propelling the narrowbody fleet will need overhauls.

After booking record orders in 2011, ATR wants to increase revenues by 20% this year.