The end of the past decade saw a round of consolidation among airlines and the creation of global megacarriers. But that buyout binge may have been the tip of the iceberg as carriers adjust to higher operating costs and consumer demand that they spread their wings over all corners of the globe.

A full 81% of airline execs around the world surveyed by CIT Group Inc. (NYSE:CIT) and Forbes Insights expect consolidation will increase over the next five years. Jeff Knittel, head of CIT's transportation finance unit, said factors driving consolidation "include marketing synergies, the need to optimize labor efficiency and cost, and opportunities to optimize fleet capacity."

Airlines are in integration mode at the moment, coming off deals including Delta Air Lines Inc.'s (NYSE:DAL) purchase of Northwest Airlines Corp., United Airlines Inc.'s merger with Continental Airlines Inc. and Southwest Airlines Co.'s (NYSE:LUV) pending deal to buy AirTran Airways Inc. (NYSE:AAI). Outside of the U.S., there have been deals, including British Airways plc's (LSE:BAY.L) combination with Iberia Líneas Aéreas de España SA and the amalgamation of two Greek airlines in Europe, the buyout by Chile's LAN Airlines SA (NYSE:LFL) of Brazil's TAM SA in South America.

The deals represent some progress in right-sizing an industry plagued by fragmentation, but William S. Swelbar, research engineer at the Massachusetts Institute of Technology's International Center for Air Transportation, said more work is needed. In a late-December note, he estimated that in 2010 the global airline industry earned a profit of just 2.7 cents for each dollar of revenue, which he calls "paltry when compared to other businesses that earn on the order of 6-7 cents" from each dollar of sales.

"Such slim profits cannot support the 1,500 or so airlines out there for long," Swelbar wrote. "The industry simply needs to be able to consolidate shares of a disparate and a highly fragmented global structure just as steel and autos and shippers have done."

In the U.S., domestic mergers have left just four pre-deregulation airlines, each tied to one of the three international groupings. Future dealmaking remains possible, with Delta often linked to a potential bid for Alaska Air Group Inc. (NYSE:ALK) and AMR Corp. (NYSE:AMR), parent of American Airlines Inc., growing closer to JetBlue Airways Corp. (NASDAQ:JBLU) North American airlines are also beginning to look overseas.

Delta, which briefly held the title of the world's largest airline following its 2008 purchase of Northwest, last year bid to invest in troubled Japan Airlines International Co. Ltd. More recently, the Atlanta-based carrier, according to sources, has been weighing an investment in Virgin Atlantic Airways Ltd. in hopes of building a stronghold at London's Heathrow Airport.

"The holy grail in airline consolidation is cross-border deals," a transportation banker said. "The airlines are extracting all of the efficiencies they can out of alliances. As that low-hanging fruit disappears and regulators grow more comfortable with international cooperation, someone is going to push that envelope even further."

United Continental Holdings Inc. (NYSE:UAL), now the world's largest airline, could seek to strengthen its ties to Europe and Japan once its integration of United and Continental is complete, the banker predicted. AMR, meanwhile, is steadily moving closer to its alliance partners, British Airways and Iberia, but likely needs to manage its own costs before moving too far.

The Western airlines are also seeking to expand their reach into emerging markets such as India and China. While those governments are focused on building their domestic transportation networks and largely unwilling to see local companies acquired outright, "there is an opportunity to trade cash for access," the banker said.