IAG, the owner of British Airways and Iberia rang the alarm bells on its exposure to Spain, announcing contingency plans for a euro exit by the country.
International Airlines Group (IAG) said it had set up a team to study the impact on the business if Europe's fourth largest economy was forced to leave the single European currency.
IAG said the group meets every two weeks to "scenario plan based on previous shocks to the business" and had drawn up "a Spain Euro exit roadmap project which considers the commercial, administrative, systems and people issues to be addressed" if Spain was forced to leave the euro zone.
Spain lies at the heart of the single currency's sovereign debt crisis as it struggles with a second recession in three years, record unemployment and soaring bills from its regions and debt-laden banks.
The move comes as IAG announced plans to overhaul Iberia as the group tumbled to a first-half group loss and cut its full-year earnings guidance.
European airlines are being hit by slower spending on air travel amid the euro zone debt crisis as well as by high fuel prices, and many have responded by shutting down unprofitable routes and limiting their spending.
IAG's European peers Lufthansa and Air France-KLM have embarked on cost cutting, trimmed profit forecasts and dropped plans to expand capacity and fleets this year after results were battered by high fuel costs and weakening consumer demand.
In recent years - amid weak economic growth, high unemployment and an uncertain outlook - companies and consumers have changed their attitudes on how much service and comfort they are willing to pay for, with many switching to low-cost airlines such as Ryanair and easyJet.
BA and Iberia sealed an USD$8 billion merger in 2010, a move that helped the pair stem huge losses following the worst industry downturn in decades.