Airline group IAG profit rises on Iberia recovery


British Airways owner reported a 55 percent rise in second-quarter operating profit on Friday, mainly due to a recovery at Spanish airline Iberia.

IAG, Europe's second-largest airline by market value, posted operating profit before exceptional items of 380 million euros (301 million pounds), ahead of a company-supplied consensus forecast of 354 million euros.

Angel Navarrete | Bloomberg | Getty Images

IAG, which also owns Spain-based budget airline Vueling, reiterated its target to increase 2014 operating profit by at least 500 million euros from the 770 million euros it made last year.

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The outlook shows IAG is weathering an increasingly competitive European airline market better than rival former state-owned carriers, such as Lufthansa and Air France-KLM, helped by low-cost Vueling which it acquired last year.

The rival airlines have both issued profit warnings in recent weeks and said they are focusing on ramping up their presence in Europe's low-cost short-haul market, dominated by easyJet and Ryanair.

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IAG said it would trim capacity in the winter by around 3 percentage points.

Its shares, which have fallen 19 percent over the last three months, gained 3 percent on Friday.