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The owner of British Airways has announced annual record profits, boosted by high demand for holidays as the travel industry recovers from the pandemic.

International Airline Group (IAG) reported operating profits of €3.5bn (£3bn) in 2023, close to three times that of 2022 and higher than its pre-pandemic peak.

The group, which also owns Spanish airlines Iberia and Vueling as well as Ireland's Aer Lingus, said it had seen "strong and sustained demand for travel".

IAG's results come amid a surge in profits for airlines, which have pushed up fares as demand for travel returns after years of Covid disruption.

IAG chief executive Luis Gallego said the group's capacity was now close to pre-pandemic levels in most of its main markets.

Total revenues at the group rose to €29.4bn (£25bn), up from €23bn in 2022.

Demand for flights continues to be "robust", IAG said, especially for leisure travel. The group said its flights were 92% booked for the first three months of 2024 and 62% booked for the first half of the year, which is a stronger position than it was a year earlier.

However, IAG said risks remained, including the impact of higher inflation and interest rates, higher costs and the potential impact of ongoing conflicts in various regions.

In a call with reporters, Mr Gallego said the airline group had seen little impact from the sluggishness in the UK economy, with consumer demand continuing "to be very strong, particularly in leisure".

There was no comment on whether air fares would rise this year, with the IAG boss saying they would be "determined by the market".

IAG said it would be investing in 178 new aircraft between 2023 and 2028, which would be "20% more fuel-efficient than the previous generation and significantly quieter".