International Airlines Group has upgraded its profit forecast after it reported a 30 per cent rise in third quarter profits.

Operating profits at IAG - which owns both Iberia and British Airways - rose to €900 million in the three months to September 30th, up from €690m a year ago.

IAG added that it expected an improvement in annual operating profits of €550m-€600m, compared with previous guidance of a rise of at least €500m.

In addition, IAG also owns the Spanish airline Vueling.

IAG chief executive Willie Walsh, said: “We continued to grow capacity efficiently and both our non-fuel and fuel unit cost performances were strong with the latter boosted by the introduction of new, more efficient aircraft into our fleet.”

Operating profits at British Airways rose to €607m from €477m a year earlier.

Profits at Iberia rose to €162 million from €74 million last year.