Unions had threatened strike action in protest against plans to axe about 4,500 jobs, or a quarter of its workforce.

Iberia, which is part of International Airlines Group (ICAG.L) along with British Airways, says that the job cuts are needed to guarantee its survival amid rising competition and Spain's recession.

Management and unions representing ground and cabin crew will negotiate the shape of the job cuts until January 31, Iberia said in a statement on Monday. It also invited pilots union SEPLA to join the talks.

The ground and cabin crew unions, which represent 93 percent of total staff, will not call any strikes in January after Monday's agreement, a union spokesman told Reuters. (Reporting By Tracy Rucinski; Editing by David Goodman)

• A Permanent Economic Emergency