Iberia has posted a return to profit in the second quarter, reporting gains of £31 million.
The figures were a marked improvement on the €73 million loss suffered in the same period of 2009.
The Spanish carrier - which has provisionally agreed to merge with British Airways - said cost savings of 5.9% were made in the first half of this year.
The airline said it spend less on full and brought seat capacity on its aircraft back into line with demand.
A statement from the company said the Q2 success was down to both a recovery of the international business market - meaning fuller premium class cabins - and a pan-European sales drive.
The airline claimed to have lost €20 million as a result of the volcanic ash crisis an air space lockdown in the spring.