Iberia, the Spanish airline unit of IAG (IAG), canceled 118 flights today as pilots' union Sepla called a strike to protest against the creation of a lower-cost carrier for short-haul trips.

Iberia canceled 36 percent of its scheduled flights today, including international and national flights, affecting more than 10,000 passengers, the Madrid-based company said in a statement. Sepla also called a strike on Dec. 18.

The company, which merged with British Airways at the beginning of this year to create International Consolidated Airlines Group SA, plans to transfer planes to the Iberia Express unit in 2012 to boost the profitability of domestic and European services. The new fleet is scheduled to be established in three months.

Iberia said it offered alternative flights with Iberia and other airlines to customers affected by the strikes. It also offered ticket refunds and 9,000 hotel rooms from Melia Hotels International SA (MEL) in Madrid.

Iberia said in a Dec. 27 statement that the creation of Iberia Express is "unnegotiable." Strikes by pilots won't stall the transfer of aircraft to the lower-cost operation, Iberia Chief Executive Officer Rafael Sanchez-Lozano said in a Dec. 20 interview.

"No matter what happens, Iberia Express will be operating as planned," he said.

A spokeswoman for Iberia wasn't immediately available for comment when contacted by telephone today.