International Airlines Group has reported pre-tax profits of €2.49 billion for the year ended December 31st, up 5.6 per cent on the figure of €2.36 billion recorded the year before.

The group - which controls British Airways, Iberia, Vueling, and Aer Lingus - said revenue for the year was up 1.8 per cent to €22.97 billion.

Following the results, the airline group said it would launch a €500 million share-buyback program and declared a dividend of 14.5 cents a share.

IAG chief executive Willie Walsh said: “All our airlines performed extremely well with their best-ever individual financial results, strong operational performances and commitment to customer service.

“The turnaround in Vueling, following the challenges of 2016, has been particularly outstanding.

“In quarter four we reported an operating profit of €585 million, down from €620 million last year.

“Our strong performance continued with passenger unit revenue up 2.4 per cent at constant currency.

“The operating profit was impacted significantly by changes in the employee bonus provision in the quarter compared to the previous year.”

Fuel costs before exceptional items were down 7.8 per cent over the year.

However, fourth-quarter fuel costs before exceptional items were up 1.2 per cent.

At current fuel prices and exchange rates, IAG expects its operating profit for 2018 to show an increase year-on-year, the company said in a statement.

Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.

IAG saw its share price fall by nearly five per cent following the release of the results, with quarter four revenue of €5.47 billion falling short of market expectations of €5.6 billion.