Spanish airline created by law on June 7, 1940, and given rights to the air transport of persons and cargo within Spain. It took control of a privately owned company established in 1937, which in turn had revived the name of a company called Iberia, Compañía Aérea de Transportes, founded June 28, 1927; the current name was adopted in 1941. Iberia was nationalized in 1944, but in the late 1990s the Spanish government began privatizing the carrier, selling its last share in 2001.

In the beginning, Iberia's service was entirely within Spain (including service to the resort of Majorca). After World War II, beginning in 1946, Iberia developed services to London and Latin America. Direct service to New York City was opened in 1954. Iberia now has a fleet of more than 200 airplanes and flies to various points in Europe, Africa, and North and South America. It is part of Iberia Group, which also has regional airlines and an air freight company.