International Airlines Group – operators of British Airways and Iberia – has seen profits soar during 2011.

In total the group recorded operating profit of €485 million over the 12 months to December 31st, up from €225 million the previous year.

Revenue was also up 10.4 per cent to €16.4 billion.

Fuel costs were up 29.7 per cent over the year, while other operating costs also increased 1.1 per cent.

However, revenue per passenger was up 3.6 per, on top of capacity increases of 7.1 per cent.

Willie Walsh, IAG chief executive, outlined the challenges faced by the different airlines in the group.

“The north Atlantic market remains strong, benefitting British Airways,” he explained.

“Iberia’s challenge is its exposure to financial uncertainty in the Eurozone in a highly competitive marketplace with no-frills airlines, high speed rail and growing competition from more efficient long-haul airlines.

“Its management has been focused in addressing this, however, the challenge remains for Iberia to become more competitive especially as it has a high cost base and outdated workplace practices.

“The launch of Iberia Express in late March, alongside the restructuring of its network and hub, will enable Iberia to become more customer focused and cost effective.”

Walsh also criticised changed to Air Passenger Duty in the UK.

“British aviation’s competiveness is undermined by the UK government’s determination to continually increase Air Passenger Duty with the latest rise due this April.

“In 2011 British Airways paid almost £500 million in APD.

“As a result of the latest increase, the airline is reducing by around half the number of new jobs it’s creating this year and has postponed plans to bring an extra Boeing 747 back into service.”