Horacio Echeberrieta and Lufthansa invested 1.1 million pesetas and incorporated Iberia, Compañía Aérea de Transportes on the 28th of June, 1927.
Commercial operations started in mid-December, 1927, providing postal transport from Madrid to Barcelona, a service sponsored by the Spanish government.
In 1928, Iberia was merged into Compañía de Líneas Aéreas Subvencionadas S.A. (C.L.A.S.S.A.), ceasing activities in late May, 1929.
The « Iberia » name was used during the Spanish Civil War, and then it became a purely domestic airline.
In 1944, Iberia was nationalized, becoming a part of INI.
Two years later, a Douglas DC-4 flew from Madrid to Buenos Aires, making Iberia the first airline to fly from Europe to South America after the end of World War II.
In 1953, visa requirements were eliminated for US visitors to Spain, so transatlantic flights managed to increase their frequency pretty easy.
By the 50th anniversary of Iberia, in 1977, the airline carrier more than 10 million passengers per year for the first time.
Growth continued in the following two decades, but Iberia was privatized again in 2001, with shares being listed on stock exchanges.
Almost 500 million passengers had flown with Iberia by 2002, when the 75th anniversary of the airline was celebrated.
On the 29th of July, 2008, British Airways and Iberia confirmed they are in merger talks. They confirmed the deal on 12 November 2009, which should become effective by the end of 2010, allowing both airlines to maintain their own brands, and Iberia to hold 45% of the newly formed entity.
In March, 2009, Iberia announced that between 2009 and 2011, its economy class on all its planes will be renovated, while a new business class for its long haul planes will be designed.
On November 12th, 2009, Iberia established that the airline had reached an introduction agreement to join with British Airways. The union between the two airlines will generate the third-largest airline of the world talking about revenues.
On April 25th, 2010, it was established that Iberia and British Airways had approved to a fusion, forming the International Airlines Group, even though each airline would keep on operating under its existing brand. International Airlines Group, defined its head office in the city of London and its registered office in the city of Madrid, working principally from its two major hubs of Madrid Barajas Airport and London Heathrow Airport with derived hubs at Barcelona El Prat Airport and at London Gatwick Airport.
In January 2011, the merger was finalised, and the International Airlines Group (IAG) became the second-largest airline group in Europe and the world’s third-largest airline in terms of annual revenue.
In 2012, Iberia established Iberia Express, its own low-cost subsidiary, which began operating on 25 March with 4 Airbus A320s in a two-class configuration, Business and Economy.
As of 2016, the Airbus A330 and new A340-600 fleets are equipped with personal touch screens in all classes.
In October 2016, Iberia unveiled its new Premium Economy cabin, which became available starting the summer of 2017. The new cabin will be installed on long-haul aircraft. Seats in the new Premium Economy cabin will be 19” wide and recline by an additional 40% compared to those in the Economy cabin, and the distance between rows will be extended to 37”. Iberia will be the only airline that will offer Premium Economy seating class on direct flights between Spain and Latin America.
In June 2017, Iberia started operating LEVEL flights under its IB flight code. LEVEL was established in 2017 by IAG as a low-cost long-haul airline offering transatlantic services from Barcelona – El Prat Airport, but in 2018 the airline expanded with long-haul services from Paris Orly Airport, eventually taking over the operations of OpenSkies, and short-haul services from Vienna International Airport.
In June 2018, Iberia took delivery of its first Airbus A350 900 aircraft. The wide-body aircraft has a three-class configuration with 31 Business full lie-flat beds, 24 Premium Economy seats, and 293 Economy seats. All seats feature in-flight entertainment screens, power outlets, optional onboard Wi-Fi, and panoramic windows.
In June 2019, IAG announced a firm order for 14 Airbus A321XLR aircraft to expand its single-aisle fleet, eight of which are destined for Iberia. The new aircraft will enable Iberia to operate new transatlantic destinations and increase frequencies in key markets.
The first deadly accident involving Iberia took place in 1957, when 21 people flying in a DC-3 perished, while the last one happened in 1985 when a Boeing 727 crashed, and all 148 people on board died.