Iberia is on “the path to recovery” and will return to making a profit next year following a “significant crisis”, the chief executive of International Airlines Group has said.

Speaking at the AOA conference in London, Willie Walsh said the troubled Spanish airline would make money following its restructure.

Earlier this year it was announced that losses at the airline came in at €351 as the poor performance by the Spanish carrier dragged IAG into the red last year.

Walsh said: “Iberia is loss-making at the moment but we will bring that back into profit.”

“Iberia … has been restructured and will make money,” he later added. “It is on the path to recovery – it was in a significant crisis.

“It will be profitable next year. Vueling is profitable and BA is profitable – the whole group will be profitable next year.”

Walsh also said Iberia was competing with Ryanair in the low-cost market in Spain but conceded that the Irish carrier is taking more capacity out of the Spanish market. “I’m not going to say that my fares are always as low as his [Michael O’Leary]”, he added.