Low-fare airline easyJet is proposing to close its Madrid base from winter 2012/13 but will continue to fly to the Spanish city from other bases.
The budget carrier said it was reviewing options for its eight Madrid-based aircraft and 310 crew.
EasyJet said all pilots and cabin crew in Madrid would be offered a job in the airline's other bases and that it hoped to retain as many staff as possible.
The airline said Madrid was delivering returns below all its other bases and that there were high airport charges.
While easyJet proposes to reduce its capacity to and from Madrid by around 20% in the next financial year, the reduction to and from Spain will be 7%. After the proposed changes easyJet expects to carry more than 12 million passengers to and from Spain next year.