UPDATE 1-Iberia Jan loadings hit monthly record 80 pct

* Jan load factor 80.0 pct vs 74.1 pct yr-earlier

* Jan passenger traffic up 1.8 pct to 3.92 million

* Shares close down 3.4 pct before data release

(Adds passenger numbers, background, share price)

MADRID, Feb 12 (Reuters) - Passenger traffic at Spain's Iberia IBLA.MC rose 1.8 percent in January from a year earlier underpinned by a recovery in demand as well as a favourable year-on-year comparison, the airline said on Friday.

Iberia said it carried a total of 3.92 million passengers in January, while its load factor -- a measure of how full its planes flew -- rose 5.9 percentage points to 80.0 percent, a record for the month of January, thanks in part to a cut in capacity.

Shares in Iberia, which plans to merge with British Airways BAY.L this year, closed down 3.4 percent at 2.08 euros, before the figures were released.

British Airways carried 7 percent fewer passengers in January year-on-year [ID:nLDE61409M], while rival Air France-KLM's passenger traffic fell 1.6 percent [ID:nLDE6170A].

Industry body IATA last month said the aviation sector would face a tough 2010 making up for the demand lost in 2009 and handling new security requirements [ID:nLDE60Q0TF]. It estimated that airlines are set to lose $5.6 billion this year [ID:nLDE5BD1R6].

(Reporting by Judy MacInnes; Editing by Erica Billingham)