"Iberia changes or she dies," Iberia director general Luis Gallego said at the presentation of the new logo which alters the lettering but keeps the red and yellow colours of the Spanish flag.
"The brand is just a link in the chain of everything that we are doing to improve the company's revenues," he added.
Loss-making Iberia, part of the International Airlines Group (IAG) along with British Airways, has also redesigned the interior of its cabins, introduced new uniforms and revamped its website.
The airline has also cancelled dozens of routes and shed thousands of staff to reduce operating costs and return to profitability.
Iberia's losses widened to €351 million ($473 million) last year from €98 million euros in 2012.
As well as being hit by the Spanish recession, Iberia is struggling to compete with low-cost carriers led by Ryanair and new Latin American rivals such as Latam Airline Group.
The company and unions announced a deal in March to cut 3,100 jobs following months of strikes and protests.
The president of Iberia and IAG, Antonio Vazquez, said the new logo and brand "was part of an extremely ambitious transformation which we have been carrying out over the last three years."
The restructuring plan will lead to an improvement in the airline's financial situation "which we will see very shortly", he added.