Madrid - The net profit of Spain's biggest airline Iberia plunged 90 per cent to 32.2 million euros (41 million dollars) in 2008, the carrier said Friday.

Iberia, which is in merger talks with British Airways, attributed the losses to weakening demand created by the economic downturn.

Fuel costs also increased by 521 million euros in 2008.

The size of Iberia fleet went down from 136 aircraft in 2007 to 119 in the end of 2008. (dpa)