Spanish airline Iberia has been forced to cancel flights today as pilots walk out on strike.

More than a third of its flights out of Spain were cancelled as staff walked out in a dispute over the creation of the new low-cost carrier Iberia Express.

Passengers were largely unaffected, the airline said earlier, with most rebooked onto other carriers or accommodated on the remaining Iberia services.

Iberia Express is due to launch service in earlier 2012.

Iberia is creating the subsidiary to compete with Ryanair and easyJet on short-haul and medium-haul routes.

However, pilots argue is breaks collective bargaining agreements signed during the creation of International Airlines Group (which now operates Iberia alongside British Airways).