Pilots say the launch of Iberia Express contravenes deals struck when Iberia and British Airways merged to form International Airlines Group.

IAG and Iberia believe starting the new airline is the only way to make the loss-making Spanish unit profitable.

European airlines are battling soaring fuel prices, weak demand from cash-strapped passengers and the burden of new taxes on air travel as well as fierce competition from low-cost carriers such as Ryanair (RYA.I).

Iberia Express is designed to complement Iberia's more profitable long-haul flights, flying to 17 national and European destinations including Dublin, Naples and Amsterdam. Iberia estimates it will attract 2.5 million passengers.

Iberia pilots will strike every Monday and Friday from April 9 to July 20, their union SEPLA said on Tuesday.

"The company intends to divert 40 planes from the main group to the new subsidiary, which would mean the elimination of 8,000 jobs," SEPLA said.

Pilots held 12 days of strikes between December and March but called off strike action after both parties agreed to mediation. Talks broke down on Sunday.

(Reporting By Robert Hetz and Sarah Morris; Editing by Tracy Rucinski and David Cowell)

• A Permanent Economic Emergency