By Clare Kane
MADRID (Reuters) - Dozens of Iberia flights were canceled on Monday as workers at the loss-making Spanish flag carrier began a five-day strike over job cuts that is expected to cost the airline and struggling national economy millions of euros in lost business.
There was little sign of chaos on Monday morning in Barajas airport in Madrid, Iberia's hub, as the airline had already rescheduled most passengers on other flights or returned them their money.
Staff, including baggage handlers and air stewards, are holding the strikes in February and March to protest management plans to axe 3,807 jobs and cut salaries at the airline.
Workers kicked off the action with demonstrations at airports and plan a street protest in central Madrid on Wednesday evening.
Unionists began an 8 km-march (5 miles) around Barajas on Monday, telling reporters the airline was under threat, as was the future of the airport.
"Nobody is safe from being sacked," said Elias Gonzalez, a maintenance supervisor at the protest who has worked for Iberia for 27 years.
"There was an initial deal with the company when the merger with the British was agreed, but now there is disagreement."
In anticipation of the strike, Iberia had already canceled 415 flights between Monday and Friday, and as many as 1,200 flights operated by various airlines will be disrupted because of the lack of handling services at Spanish airports.
Domestic flights were the worst affected, with almost half grounded between Monday and Friday, Iberia said, while 10 percent of its lucrative, long-haul flights were canceled[ID:nL5N0BEAXS].
The February 18-22 strike, the first of three scheduled week-long stoppages, coincides with school holidays in Britain, Spain's biggest source of tourists.
Tourism accounts for around 11 percent of Spanish economic output and is one of the country's very few growth sectors in a prolonged recession that has pushed the unemployment rate above 26 percent.
Iberia, which merged with profitable British Airways in 2011 to form the International Airlines Group, reported a loss of 262 million euros ($349.78 million) in the first nine months of 2012.
The airline argues restructuring is vital to return the Spanish unit to profitability while unions say the IAG management is degrading pay and benefits in Spain through its low-cost airline Iberia Express.
Some 70,000 passengers will be affected during the Monday to Friday strike this week. About 86 percent have been given a different flights, including those operated by other airlines, while 14 percent had asked for refunds.
On Monday 37 flights due between 0800 and 1400 GMT (3 a.m. ET and 9 a.m. ET) were canceled at Madrid's Barajas airport, most of them Iberia flights but also three British Airways flights to London and a Luxair flight to Luxembourg.
Since the unions notified the strike two weeks ago and the transport ministry obliged them to offer a skeleton service under Spanish strike law, virtually no passengers were stranded at Spanish airports.
Iberia is just one of several companies in Spain, including Vodafone and bailed-out lender Bankia, to lay off workers.
It is fighting an uphill battle against low-cost operators, a depressed domestic economy and competitors that are in better shape after having already gone through restructuring processes.
Sabadell Bolsa analysts said the total 15 days of strikes could cost Iberia between 50 million euros and 100 million euros of losses. ($1 = 0.7490 euros)
(Additional reporting by Robert Hetz, writing by Clare Kane and Sarah Morris, Editing by Angus MacSwan)