Spanish airline Iberia announced profits of €31 million during the second quarter of 2010, which the firm attributes to the successful implementation of cost savings initiatives as well as increased demand for international travel. The successful second quarter is a significant departure from the €73 million loss the firm suffered during the same period in 2009, and company executives hope the strong performance is a prelude of things to come once Iberia merges with British Airways later this year. The two firms announced the intent to consolidate this past April, and once completed, the newly-formed International Airlines Group will be among the largest airlines in the world.

According to a representative for Iberia, the financial recovery enjoyed by the firm during the second quarter is directly related to a substantial increase in international business travellers, as domestic demand fell short of expectations. The spokesperson went on to say that cost-cutting initiatives at Iberia helped decrease overall expenditures by 5.9 per cent, another factor which contributed to the firm’s success.

The highly anticipated merger with BA is expected to be completed by November, after which the company headquarters will be in London, with BA shareholders controlling 55 per cent of the firm. Although the two companies will be consolidated under one corporate umbrella, both BA and Iberia will continue day-to-day operations as separate and unique entities.