British Airways owner flies back into black

International Airlines Group (IAG), owner of British Airways and Spain’s Iberia, has returned to profit and said it was on course to meet its earnings target for 2015 as it benefits from lower fuel costs.

The group, which also owns bmi and Spanish low-cost carrier Vueling, reported an operating profit before exceptional items of €770 million (£631.2m) for 2013, compared with a loss of €23m a year earlier and ahead of analysts’ forecasts of €765m.

Revenues grew 3.1 per cent to €18.7 billion, helped by a 23.1 per cent jump in passenger numbers to 67.2 million.

Chief executive Willie Walsh said Iberia, which has been shedding staff and trimming pay in a bid to turn its fortunes around, narrowed its losses to €166m, while British Airways profits soared to £651m, from £274m in 2012.

Walsh said: “In 2014 we expect to make steady progress towards our 2015 group operating profit target of €1.8bn, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.”