The surge in global stock markets and signs of returning consumer confidence suggest global demand for air travel could pick up by mid-2010, said the president of Emirates airline.

Tim Clark, who has held his post since 2003, said barring another stock market crash or evidence of a deepening recession, consumer spending is likely to return by next year – a trend that would benefit global carriers.

"On the basis of what we see looking ahead, I think we'll be OK," he said. "I think things will start to come back in the summer of next year."

Clark's comments represent a sharp turnaround from his outlook earlier this year. In June, he said on the sidelines of a Kuala Lumpur aviation conference that "every day is a fire-fight" and said the Dubai-based airline had cut fares by 30 per cent to drum up demand.

In May, Emirates reported a 72 per cent drop in annual net profit. But now, after a stronger-than-expected summer performance, Clark's outlook has improved.

Emirates has raised fares about 22 per cent since June, without any slip in load factors. Passenger traffic is more than 20 per cent higher this summer than last year. Higher fares have helped the carrier edge towards profitability, said Clark.

"I feel a little bit guilty for allowing fares to fall as low as they did because clearly the market would have supported higher fares," he said.

He is quick to note that it could take more time for airlines to see a full recovery of demand, echoing comments from industry group, the International Air Transport Association. Last week, Iata said a recovery in air traffic was under way, but would likely be volatile and weak.

In response to shrinking profits, Emirates slowed its capacity growth. The carrier is currently the single largest customer of Boeing 777 model and a major Airbus buyer as well.