Spanish carrier Iberia reported a 35.7% drop in its operating earnings to €116.4m for 2005.
It blamed the "sharp rise" in fuel prices of around 42% but the airline has also been under pressure from the low cost carriers on its European and domestic routes.
But its net earnings after tax rose by 98% to €395.8m. This was mainly due to the sale of its holdings in the IT companies, Amadeus and Savia which raised €663m.
More than half of this money was used for redundancies and severance payments to staff (€280m) and fleet replacement (€105m).
This was part of the airline's Strategic Plan which involved a 9% cut in staff levels.
Iberia also reported a record load factor of 77.1%, a rise of 1.9% on 2004. The last quarter of 2005 saw a 3.6% rise.
It carried 27.7m passengers during the year, an increase of 3.7% on 2004.
NH Hoteles earnings up 13%
The Madrid-based NH Hoteles reported a rise in earnings for 2005 of 13% to €62.2m.
The group, which is widely used by business travellers across the continent, said its hotel operating profits for the year rose by 8.5% to €127.2m while hotel sales rose by 4.6% to €901.2m.
NH said Spain and Portugal had the highest revenues with €348.4m, a rise of 2.1% on 2004. But Switzerland, Hungary and Austria saw their revenue rise by 11.3%, the Benelux countries by 5.8% and Germany by 4.9%.
It said its German properties had "practically reached break even point" with a 92.7% rise in pre-tax earnings. Switzerland and Austria recorded a 79.8% rise in pre-tax earnings.
NH Hoteles has 258 hotels with 37,643 rooms in 19 countries in Europe, Latin America and Africa.