Traffic, measured in revenue passenger kilometres, rose 0.7 percent versus January 2012 on capacity 1 percent lower, while passenger load factor - a measure of how well it fills its planes - was up 1.3 percentage points at 77.0 percent, it said on Tuesday.

IAG said its first and business-class travel - the most profitable part of its passenger business - rose 2.7 percent, while non-premium traffic rose 0.3 percent.

British Airways' January traffic was up 5.1 percent compared to a 10.3 percent fall at Iberia.

IAG has seen worsening economic conditions in Spain hit its performance in recent months, undermining strength in long-haul travel out of London.

IAG, which failed to reach an agreement with Spanish unions over job cuts at Iberia, last week said it would press on with plans to cut capacity by 15 percent this year, by focusing on profitable routes and reducing its fleet by 25 aircraft, rather than the 10 percent it had put forward in negotiations.

Unions rejected IAG's offer to reduce job cuts at the Spanish airline by 30 percent to 3,147 and lower wage reductions, with Iberia workers now planning five days of strikes later this month.

 Shares in IAG, which have risen by a quarter in the last three months, were 2 percent up at 214.65 pence by 1505 GMT, valuing the group at around 3.9 billion pounds ($6.14 billion).