BRITISH Airways’ owner International Airlines Group said it was on track to more than double profit over the next two years, as a turnaround at its Iberia unit gains traction and it drives down costs across its business.
IAG swung to a profit last year, boosted by a strong performance at British Airways and on revenue from newly acquired low-cost carrier Vueling, which competes with Ryanair and easyJet in European short-haul.
Operating profit was 770m euros before exceptional items last year, from a 23m euro loss in 2012.
IAG’s target, which it raised by 12.5 per cent in November, is to lift operating profit to 1.8bn euros for 2015, through cost cuts at BA, Iberia’s recovery and Vueling growth.
Chief executive Willie Walsh said the company was heading in the right direction to be able to reinstate its dividend.
“Our intention is to get the business to a position where it can pay a dividend and sustain the significant capital expenditure programme that we have embarked on,” he said.
“Clearly, with the progress we’ve made in 2013 over 2012, and our restatement of our goal for 2015, we’re certainly on track to achieve that situation.”
Iberia, which has dragged on group earnings since the merger with BA in 2011, narrowed its operating loss by 185m euros to 166m euros in the year.
“Iberia’s making good progress. It’s ahead of where we believed it would be in 2013 and is on line to be profitable in 2014,” Mr Walsh said.
British Airways said the carrier remains committed to its Leeds Bradford Airport route.