Chief financial officers and heads of cargo at the world's airlines reported growing confidence in their profitability and an improved outlook for the next 12 months, according to a survey by the International Air Transport Association.

"With the U.S. economy showing improvement and emerging markets continuing to grow strongly, expectations have become more optimistic," the trade group, which represents about 240 airlines in 118 countries, said in its quarterly business confidence index.

IATA said about 23 percent of respondents reported improved profitability in the last 3 months. The participants reported improved passenger traffic over the last quarter, with expectations for further growth ahead.

But high oil prices and concerns about political uncertainty in Iran have propped up costs. IATA said 64 percent of respondents reported increased cost pressures. Airlines expect a significant increase in their operating costs over the next 12 months, IATA said. (Reuters)