The industrial dispute at Qantas appears to be getting personal, as Australian Federal Police (AFP) investigate threats made to the airline's chief executive Alan Joyce.

International Airlines Group, formed from the merger of Iberia and British Airways last year, said on Thursday it had set up a new carrier to handle short- and medium-haul flights from Spain, called Iberia Express.

Thousands of Qantas passengers have turned up at airports this morning to discover their flights have been cancelled, even though strike action was called off yesterday.

The grim economic outlook has started to hit the world's airlines, as businesses and consumers begin to cut their travel spending in response to fears of recession.

The European Union's plan to force international airlines to buy permits for their carbon dioxide emissions is in line with international law, Europe's highest court said in a preliminary opinion Thursday.

Air Canada, Canada's biggest airline, and tiny rival Porter Airlines filled more seats on their flights in September but the planes of No. 2 carrier WestJet were emptier even though it offered seat sales during the month.

European rules forcing all airlines to pay for carbon emissions are within the law, an adviser to Europe's highest court said on Thursday, in the latest stage of a bitter battle between the European Union and the aviation industry.

Low-cost carrier Tiger Airways is facing complaints in both Australia and the Philippines after the grounding of the domestic services of Tiger Airways Australia, local media reported on Tuesday.

Australia's Qantas Airways industrial fight with unions has turned violent, with racist threatening letters sent to the airline's chief and other management staff and cars and homes of Qantas staff damaged after they refused to strike.

The airline industry has presented its vision for a security "checkpoint of the future," which would speed up safety checks by sorting passengers according to the level of risk they pose.