The owner of British Airways has forecast a big jump in profits this year as it benefits from the "remarkable" turnaround of Spanish carrier Iberia.

International Airlines Group, which was formed from the merger of the two airlines in 2011, posted operating profits of 1.39 billion euro (£1 billion) for 2014 after it returned Iberia to the black following many years of losses.

With lower oil prices also helping the performance, 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.

The company said it expects further improvement from the two airlines this year, with group operating profits set to exceed 2.2 billion euro (£1.6 billion).

Fuel costs and emission charges fell by six per cent to just under six billion euro (£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 euro (£36.3 million) last year compared to an operating loss of 166 million euro 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.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said exposure to recovering economies such as the United States, UK and Spain was playing its part in the performance.

He added: "IAG has travelled a long way. A difficult acquisition of Iberia is largely behind it, whilst the group continues to outperform rival flag carriers such as Air France.

"Management outlook comments inject optimism, while hopes that Air Lingus can eventually be acquired remain high."