* Sees 2013 operating profit of 740 million euros
* Q3 operating profit 690 mln euros versus 270 mln year ago
* Iberia on track for recovery
* Eyes Boeing's 777X jet
* Shares reach 52-week high
By Tracy Rucinski
MADRID, Nov 8 (Reuters) - Profits at British Airways owner International Airlines Group more than doubled in the third quarter thanks in part to a recovery at Spanish carrier Iberia, paving the way for a bumper full-year earnings forecast.
Europe's third-biggest airline group by market value said on Friday restructuring at Iberia, which has suffered from labour disputes and the loss of once-loyal Spanish consumers to budget rivals during an economic slump, was beginning to pay off.
This added to a stand-out performance from IAG's low-cost carrier Vueling and summer strength in British Airways.
Shares in IAG, which have doubled over the past year, jumped 6.3 percent to 371 pence, outperforming rivals Lufthansa and Air France and reaching a 52-week high.
IAG's performance contrasts with other European airlines such as Lufthansa and Air France-KLM which have had to cut jobs and revise growth plans to cope with rising costs and a weak economy. Even some budget carriers such as Ryanair have found conditions tough.
"The airlines within the group are performing well, underlying market conditions remain unchanged, and the profit target for the year indicates that we expect to be profitable," IAG boss Willie Walsh told reporters.
IAG is targeting 2013 operating profit of around 740 million euros ($990 million). The group had an operating loss of 68 million euros in 2012.
Broker BPI said IAG's full-year operating profit target was 14 percent above its estimates and 6 percent above consensus.
Walsh declined to update longer-term targets which he said would be provided at an investor day next week.
The company also said revenue growth would shift in 2014 from yield to volume, which would effectively mean less emphasis on pricing strategies thanks to expected higher volumes from new BA and Vueling route launches.
Revenues grew 6.9 percent in the third quarter to 5.4 billion euros.
Iberia remains a sore spot, however, and Walsh warned there was still work to be done.
The impact of low-cost airlines and high-speed trains in Spain has hit Iberia's business hard during five years of economic recession or stagnation.
"Iberia can't continue to have the costs it had when it was alone in the market," IAG Chairman Antonio Vazquez said in an interview on Spanish state broadcaster TVE on Friday.
Iberia must cut staff by 3,141 before 2015, and reduce average salaries and capacity by 15 percent and 14 percent respectively as part of IAG's restructuring plan. It has cut 1,737 employees so far, according to union data.
IAG's underlying operating profit was 690 million euros ($923 million) for the three months to end-Sept, compared with a profit of 270 million in the same period a year ago and beating a company-supplied consensus forecast for 600 million.
Profit at Iberia rose to 74 million euros in the third quarter from 1 million in the same period a year ago, while BA's operating profit surged 78 percent to 477 million euros.
Vueling made an operating profit of 139 million euros in its first full quarter with the IAG group, which on Thursday unveiled a board and management shake-up.
SIGHTS ON NEW MINI-JUMBO
Walsh said IAG was eyeing Boeing's newest jet, the 777X, intensifying the rivalry between Boeing and Airbus to secure big orders for fleet renewals.
"We've had discussions from time to time with Boeing ... we believe (the 777X) represents an attractive proposition for airlines such as Iberia and BA," the CEO said.
Boeing has already sealed an order from Lufthansa for the passenger jet, aimed to launch later this year, and is working on deals with Gulf carriers.
IAG broke Boeing's long-held grip over BA's long-haul fleet when it ordered 18 Airbus A350-1000 for the British carrier in April. It has said it was in talks with both companies to secure more planes.