I fly Iberia every year when I go to the camino, because American is the only game in town from my small town to Chicago, and Iberia is the only One World airline flying there from Chicago. I have heard so many horror stories but never have experienced anything but good service. Food is not great but it isn't on any airline. I will say though that Iberia domestic seats have the least leg room of any airline I've flown, and I'm very used to being squeezed in a plane.
One advantage of flying on Iberia is that you will arrive in Barajas in T4, the new glitzy terminal. One advantage there is that it's much better connected to the commuter rail line, Cercanías, in case youa re going to go to a train or bus station upon arrival. Another is that buying a ticket that gets you closer to your starting point (I've gone to Bilbao, Valencia, etc) and then flying home from Santiago via Madrid, is much cheaper than adding those legs on to a non-One World airline.