International Airlines Group, the new airline group emerged from the fusion of British Airways and Iberia, the Spanish carrier on Friday declared its first quarter net profit to be 33 million Euros, which during the previous year was in a loss of 243 million Euros.

During the first quarter, the IAG suffered from increase in fuel prices but managed to post the profit by cutting down its costs and increasing its capacity.

One of the IAG officials reported that Japan’s natural calamity, unrest in North Africa and Middle East will hamper its earnings by as much as 100 million Euros.

Willie Walsh, IAG Chief Executive said, "The continued focus on cost control has been achieved while we have seen some measured increases in capacity," while the former chief executive of BA said, "We have been able to increase capacity without additional aircraft and employees."

IAG in its first quarter report revealed that the group’s total earnings surged by 15 percent to 3.636 billion Euros and the pre tax losses declined from 273 million Euros to 47 million Euros.

On London’s benchmark FTSE 100 index, the shares of the IAG were at 252.90 pence, up by 2.8%.

IAG is giving tough competition to Lufthansa Airways of Germany by being the second largest airline carrying 60 million passengers every year.

In IAG, 55% of the share is of British Airways and the rest of 45% is of Iberia.