I was in Madrid the day that Air Europa Express closed.
Prior to 9/11 Iberia had a significant number of 737-400 on damp-lease from Air Europa, and returned them at the last moment.
express was a marginally loss making operation, and faced with lack of revenue from the termination of the 734 operation AE
had no choice but to close AE
Express, or risk the bankruptcy of the entire company.
At the same time Spanair terminated their North-Atlantic scheduled operation.
At this time Madrid was a real parking lot of aircraft, with significant IB
727, DC9 and DC-10 fleet parked awaiting disposal where they are now building the new terminal.
This period left Iberia a strong airline.
You are 100 times more likely to catch a cold on a flight than an average person!