BRITISH Airways-owner International Airlines Group has said it is 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 €770 million before exceptional items in 2013, from a €23m loss in 2012.

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IAG's target, which it raised by 12.5% in November, is to lift operating profit to €1.8 billion for 2015, through cost cuts at BA, Iberia's recovery and Vueling growth.

Shares in IAG, which have doubled over the last twelve months, fell 14.8p, or 3%, to 437p.

Reconfirming its 2015 profit target on Friday, IAG said it expected to make steady progress this year by cutting costs.

Cantor analyst Robin Byde said: "They're still guiding to a 2015 figure of €1.8bn, so they obviously have a lot of work to do this year.

"In that context with the stock having doubled, and these numbers only being in line, you're going to get some profit taking."

Chief executive Willie Walsh said the company was heading in the right direction to be able to reinstate its dividend.

He said: "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.

"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 to €166m in the year.