* 2013 operating profit 770 mln euros vs 765 mln forecast
* Restates 2015 profit target of 1.8 bln euros
* CEO says on track to be able to reinstate dividend
* Iberia loss narrows in 2013
* Shares down 3 pct
By Sarah Young
LONDON, Feb 28 British Airways-owner
International Airlines Group said it was 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 euros ($1 billion) before
exceptional items last year, beating an analysts' consensus
forecast of 765 million from a 23 million loss in 2012.
IAG's target, which it raised by 12.5 percent in November,
is to lift operating profit to 1.8 billion euros 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 3 percent to 438 pence by 1106 GMT.
"They're in line with consensus but one got the impression
that there was an expectation that given their cost measures and
the strength of North Atlantic that they could have beaten
consensus," RBC analyst Damian Brewer said.
Reconfirming its 2015 profit target on Friday, IAG said it
expected to make steady progress this year by cutting costs.
"They're still guiding to a 2015 figure of 1.8 billion
euros, 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,"
Cantor analyst Robin Byde said.
Chief Executive Willie Walsh said the company was heading in
the right direction to be able to reinstate its dividend.
"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," he said.
"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," he told reporters on a call.
Iberia, which has dragged on group earnings since the merger
with BA in 2011, narrowed its operating loss by 185 million
euros to 166 million euros in the year.
"Iberia's making good progress. It's ahead of where we
believed it would be in 2013 and is on line to be profitable in
2014," Walsh said.
IAG has agreed with Spanish pilots on cutting labour costs.
That and new capacity at BA would drive down units costs and
lift profits, he said, noting that performance was good across
its markets, except in the Spanish domestic market.