An Iberia worker looks at a plane as he takes part in a march towards Madrid's Barajas airport February 18, 2013. Workers at loss-making Spanish flag carrier Iberia began a five-day strike at midnight on Monday, grounding over 1,000 flights and costing the airline and struggling national economy millions of euros.

MADRID | Mon Feb 18, 2013 6:46am EST

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.

SURVIVAL

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)

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1 of 10. U.S. President Barack Obama waves next to first lady Michelle Obama as they prepare to depart Joint Base Andrews outside Washington, for their holiday trip to Hawaii, December 21, 2012.

KAILUA, Hawaii | Sat Dec 22, 2012 6:35pm EST

KAILUA, Hawaii (Reuters) - Taking what promised to be a very brief Christmas break from the ongoing struggle to avoid the "fiscal cliff" of tax hikes and spending cuts, President Barack Obama relaxed with his family on Saturday at a beach retreat in Hawaii.

Congress was to return to Washington next Thursday and Obama has pledged to work with lawmakers to strike a deal to avoid the economic shock from tax and spending measures set to take effect on January 1 if a deal can't be reached, which many economists say could push the U.S. economy back into recession.

The president is expected to indulge in some of his favorite pastimes on the island where he was born and raised: golf, an expedition for the local treat "shave ice," and an evening out with family and friends. He hit the links at the nearby Marine Corps base under sunny skies on Saturday afternoon.

On Sunday, he is expected to attend funeral services for Senator Daniel Inouye, the long-serving Democrat from Hawaii who died on Monday, but the president has no other public events on his schedule.

On Saturday, Democratic Senate Majority Leader Harry Reid said he had urged Hawaii Governor Neil Abercrombie, a Democrat, to name Inouye's successor "with due haste."

"It is critically important to ensure that the people of Hawaii are fully represented in the pivotal decisions the Senate will be making before the end of the year," Reid, of Nevada, said in a statement.

Obama's idyll was not expected to last more than four days, and he will likely retrace the more than 4,800-mile trip from the Aloha State to Washington after Christmas in a bid to cut a deal with Republicans, who failed on Thursday to agree on competing tax and spending bills of their own.

Before leaving Washington on Friday evening, Obama urged Congress to come up with a stopgap measure to spare the U.S. economy the jolt of $600 billion in tax increases and spending cuts economists say would likely derail the economy.

The president asked lawmakers for a stripped-down deal to continue lower tax rates on middle income earners and extend unemployment insurance benefits to avoid some of the worst effects of the "fiscal cliff" in the new year.

Obama's family holiday, in a quiet beach front community on the other side of the island from bustling Honolulu, should also provide some respite from the somber focus on the Newtown, Connecticut, school massacre and the consequent bitter debate over measures to change America's gun culture and prevent violence.

The president's weekly radio and Internet addresses, which in recent weeks have centered on his argument for extending tax cuts for all but the wealthiest Americans, on Saturday offered holiday greetings to U.S. military forces.

(Reporting By Mark Felsenthal and Richard Cowan; Editing by Vicki Allen, Todd Eastham and Paul Simao)

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