INCHEON, South Korea, Nov. 6 (Reuters) – Heads of members of a major airline alliance including Korean Air and Delta Airlines expressed some optimism about the industry's recovery but noted uncertainties from the H1N1 flu virus and the overall economy.

Airlines around the world have been hit by soft travel demand and low fares after last year's crisis, but are seeing a stabilizing trend.

Stronger airlines are set to benefit from the ongoing recovery by scooping up smaller rivals in trouble.

''We expect a significant recovery for (the rest of) this year and next year,'' said Cho Yang-ho, chief executive of South Korea's top airline Korean Air, adding that the recovering won and more stable oil prices were helping.

''Once things go down, they go up too... Asia has shown the fastest recovery in the world,'' Cho said.

But he warned that the spread of the H1N1 flu virus was adding uncertainty to the industry outlook.

When asked about its cargo business, ranked top worldwide, Cho said: ''It keeps growing.''

Cho and other airline executives were speaking to a news conference held in South Korea following a governing board meeting of the SkyTeam alliance.

''As we look at global airline booking trends, we have seen steady improvements since June of 2009,'' said Richard Anderson, chief executive of the world's biggest Delta Airlines.

''The recovery is still difficult in the global economy and will not be rapid or smooth necessarily. But we are seeing positive improvements in loads, yields and business travellers.''