THE owner of British Airways 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 to forecasts of about £383.4m for 2011.

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 said.

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 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.

IAG 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 profit targets now announced are for the current group and do not take into account its current deal with BMI or any future merger plans.

The group said it expected an additional £42.6m in revenue and cost savings from the merger with Iberia.

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

Meanwhile, its trans-Atlantic tie-up with American Airlines should also deliver about £127.8m in annual benefits.

BA and Iberia have linked with the US carrier as key members of the oneworld alliance, which means the trio are represented at the four largest premium passenger airports globally – Heathrow, New York JFK, Los Angeles and Hong Kong.