International Airlines Group warned on Friday that its Spanish carrier Iberia was "in a fight for survival" and unveiled a restructuring plan to cut 4,500 jobs as it reported a drop in third-quarter profit.

Iberia CEO Rafael Sanchez-Lozano said the carrier is losing money in all its markets and was "burning (euro) 1.7 million ($2.17 million) every day."

"Iberia has to modernize and adapt to the new competitive environment as its cost base is significantly higher than its main competitors in Spain and Latin America," he said.

IAG, which was formed in early 2011 by the merger of British Airways and Iberia, has given the Spanish unions a Jan. 31 deadline to reach agreement on the job cuts. If one hasn't been reached by then, the company warned there will be deeper cuts and a more radical reduction in Iberia's operations.

The proposed job cuts would shrink Iberia's payroll from 20,000 to 15,500 and its capacity by 15 percent. The company will suspend non-profitable routes, shed 25 aircraft and adjust salaries.

- The Associated Press