Shops shortlisted for the review include incumbents Interpublic Group of Cos-owned FCB/Tapsa and Omnicom Group's Tiempo BBDO, as well as Interpublic's McCann-Erickson Worldwide, WPP Group's Y&R Advertising and Bcom3 Group's Vitruvio Leo Burnett.
Of the agencies pitching, McCann already handles the Spanish account of rival airline Air Europa.
Iberia is one of Spain's few accounts of global scope, joining telecommunications giant Telefonica, Internet portal Terra Lycos, oil giant Repsol YPF and Banco Santander Central Hispano.
Iberia's last ad campaign was for its privatization last year. FCB/Tapsa handled the business.