THE owner of British Airways has said it expects profits to soar over the next four years as it benefits from its merger with Iberia.

International Airlines Group (IAG), which was formed through the merger in January, expects operating profits of £1.3bn in 2015.

The figure – its first target to look this far in advance – compares with forecasts of about £383.4m in 2010.

Greater-than-expected cost savings from the merger, efficiencies through buying planes that use less fuel and organic growth will deliver most of the expected gains.

IAG also plans to snap up smaller airlines as the rising cost of fuel and the squeeze in consumer spending drives consolidation in the industry.

Earlier this month it agreed to buy troubled airline BMI in a move which will increase its hold on the take off and landing slots at Heathrow airport.

IAG shares rose 4% today.

IAG was formed to allow BA and Iberia to make cost savings and give the combined companies the firepower to buy up smaller rivals.

The merger gave the group some 350 aircraft, flying to about 200 destinations, making it Europe’s second biggest airline by market value after Lufthansa.

It said at the time of the merger that it already had a list of 12 companies it was hoping to buy as it looked to aggressively expand. The latest profit targets are for the current group and do not take into account its current deal with BMI or any future merger plans.

It revealed it expected an additional £42.6m in revenue and cost synergies from the merger with Iberia, taking the total to an annual £400m euros by 2015.

Some £213m of the operating profit improvement will stem from the modernisation of its fleet with fuel efficient planes.