IAG, the parent company of British Airways, has upgraded its profit forecast for 2015 by more than 20 per cent after reporting soaring revenues for last year.
International Airlines Group, which was formed from the merger of the two airlines in 2011, posted operating profits of €1.39 billion (£1 billion) for 2014 - an 81 per cent increase - after it returned Spanish carrier Iberia to the black following many years of losses.
The rise was also due to sliding oil prices - and IAG said it now expects an operating profit of €2.2 billion (£1.6 billion) in 2015, compared to the €1.8 billion it had said it was targeting.
Meanwhile, the operating profit of British Airways increased to €1.21 billion (£878 million), after it boosted capacity with the delivery of five additional Airbus A380s and four Boeing 787s.
Fuel costs and emission charges fell by 6 per cent to just under €6 billion (£4.4 billion) last year and are expected to remain at a similar level in 2015.
The improved performance comes as IAG continues to drum up support for its £1 billion takeover offer for Irish carrier Aer Lingus.
Chief executive Willie Walsh praised the improvement at Iberia, which made an operating profit of €50 million (£36.3 million) last year, compared to an operating loss of €166 million the previous year.
He said: "The airline's turnaround has been remarkable, both financially and operationally, and we're very proud of its achievement especially its strong cost discipline.
"In 2013 we said our intention was for Iberia to break even in 2014 and it has fulfilled that promise."
Iberia's restructuring saw 2,500 staff leave the airline under a voluntary redundancy programme, while salaries were reduced by between 11 per cent and 18 per cent. The group employs a total of 60,000 people, including at Spain's low-cost carrier Veuling.
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