Iberia is being forced to cut capacity
Iberia has reported a loss of 165.4m euros ($237.2m; £145.7m) in the first half of the year after passenger numbers fell during the downturn.
Revenue plunged almost 20% to 2.2bn euros. The group said declines in business class passengers accounted for almost a third of this fall.
As a result of the loss, Iberia said it would cut capacity by a further 5% in the second half of the year.
The Spanish airline made a profit of 21m euros in the same period last year.
Many major airlines have been struggling against falling passenger numbers during the downturn, with a number of them reporting big losses.
On Thursday, Aer Lingus reported a big increase in first-half losses while Air New Zealand announced a large drop in annual profits.