LONDON, May 10 (Reuters) - British Airways owner IAG on Friday reported better than expected first-quarter earnings, with an operating profit of 68 million euros ($73 million), as the group saw strong bookings and projected a busy and profitable summer.

The first quarter is often loss-making for airlines, with fewer bookings at the start of the year.

"Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvement to both revenue and operating profit," IAG Chief Executive Luis Gallego said in a statement.

European rivals Lufthansa and Air France-KLM reported worse than expected first quarters as they struggled with a range of issues, including consumer payouts and strikes.

But many airlines have expressed hope that a record summer travel season and lower jet fuel prices will help balance their books by the end of the financial year, and IAG is no exception as it strives to capitalise on strong demand.

In its statement, the company said it was expecting slightly higher costs this year.

Analysts had expected IAG to report a first-quarter operating profit of 49 million euros, according to a company-compiled consensus of forecasts.

It made a profit of 9 million euros in the same quarter last year.

($1 = 0.9280 euros) (Reporting by Joanna Plucinska Editing by Mark Potter)