British Airways owner International Airlines Group (IAG) has upgraded its annual guidance after growing passenger numbers and lower fuel costs led to strong third quarter results.

IAG, which in August added Ireland's Aer Lingus to its stable of airlines, said that its full-year operating profit would range from €2.25 billion (£1.6 billion) and €2.3 billion (£1.7 billion), having previously forecast €2.2 billion (£1.6 billion).

The group said that, excluding Aer Lingus, it posted a third-quarter operating profit of €1.21 billion beating analysts forecasts.

The group, which also includes Iberia and Vueling airlines, said in its third quarter to the end of September passenger unit revenue lifted by 6.5 per cent and fuel costs fell by 8.6 per cent, compared to a year ago.

The price of crude oil has fallen by more than half since last summer to around $49 (£32) a barrel due to a production glut.

Germany's Lufthansa and Air France-KLM also both reported better than expected quarterly results earlier this week.

IAG chief executive Willie Walsh said: "We're reporting strong quarter results with a positive contribution from all of our airlines.

"Our passenger unit revenue showed a better trend than in the second quarter of the year and our cost performance remained strong."

Analysts at Liberum said: "The figures provide further evidence of IAG's outperformance of its network carrier peers."

In August IAG agreed a takeover of Aer Lingus in a deal valuing the Irish carrier at €1.4bn - after gaining agreement from the Irish government and Ryanair, which both have major stakes.