TRAFFIC STATISTICS DECEMBER 2006

Operating performance

The load factor grew in all markets, improving by 5.5 points, to 78.5%, a record level for this month in Iberia’s history. Traffic, measured in revenue passenger kilometres (RPK) went up 11.6%, against a 3.8% increase in capacity. Both traffic and load factors had the highest increases since April. The growing weight of the long haul (more than 62% of total RPK in December) led to a 7.2% rise in the average stage length. The number of passengers went up 4.1%, growing by 8.9% on international flights and remaining stable in the domestic routes.

In the long haul sector, the load factor improved by 5.6 points, to 86.7%, with increases of 17.5% in traffic and 9.9% in capacity, maintaining the important mix improvement. In December the highest capacity increase corresponded to South Atlantic routes, with increases of 27.1% in RPK and 25.4% in ASK, leading to a load factor of more than 88%. In the North Atlantic, traffic went up 9.2% and the load factor improved by 4 points. In the Mid Atlantic, the load factor improved by 8.8 points with a 12.3% growth in traffic, that registered the biggest increases (in absolute terms) in Mexico and Peru.

[GADS_NEWS]In the international medium haul, the load factor improved by 3.2 points, reaching 64.5%. In Europe, the Company continued to redeploy capacity, improving the load factor by 3.3 points and traffic by 5.7%, with the best performance in Italy and Greece. In Africa and the Middle East, traffic rose by 15.8% and the load factor improved by 2.0 points.

Domestic load factor improved by 5.6 points, the highest increase of the year, reaching 72.6%. In accordance with the Plan, Iberia continued to develop selective capacity adjustments in this competitive market, leading to a drop of 4.8% in flights to the Canary Islands (where 16 special flights were programmed) and a decrease of 11.9% in the rest of routes.

In the fourth quarter, the overall load factor improved by 3.6 points, to 79.8%, as traffic grew by 8.7% and capacity increased by 3.7%.

In the aggregate January-December, RPK rose by 7.0%, while capacity went up 3.4%; consequently, the load factor reached 79.8%, improving by 2.7 points, a new annual record for Iberia.

Highlights

· The security firm “Prosegur” and the online shop “El Placer de Regalar” (The Pleasure of gifts) have been incorporated to Iberia Plus. Therefore, the frequent flyer program includes now fifty associated companies and about three million cardholders.

· As from January 1, the new basic commission to travel agencies has changed to 0.4%, from 1% in 2006.

· Terminal 4 at Madrid-Barajas airport remained closed during some hours on the 30th of December, after the terrorist attack in one of the parking units. Flight operations were recovering progressively during the afternoon, and Iberia cancelled only three flights.