The Spanish carrier Iberia announced that they intend to open a new airline, in order to meet the needs of medium to short routes and to confront the loss of revenues caused by the economic recession.

Iberia will continue to focus on long haul flights where they are still one of the most successful airlines in the market, and the more competitive short and medium routes will be given to a new airline, that is due to open out of Madrid.

The new airline is due to be created by 2011, and will hopefully help Iberia crawl out of its current situation, which has forced the carrier to freeze the company assets and lay-off a great deal of its flight and ground crew.