The discount used to apply to the full airfare. Iberia have now (a) moved their London flight from Santiago to La Coruna (b) gone low-cost. You can check with Iberia but I doubt whether the discount still exists. In any case, the flight goes to Heathrow not Gatwick.
I did check with iberia. There is a cheap flight from La Corona for 47 euros, going to Heathrow. If the flight stops in Madrid first then the price comes up as $747 euros. Go figure. Thanks for your input. Best stay with easyjet or ryan air.
Iberia were forced to go low-cost from Corunna to compete with Ryanair, otherwise they would still be charging 100s of euros.
a low-cost alternative would be via Barcelona rather than Madrid: Vueling Santiago-Barcelona, then easyJet Barcelona-Gatwick. Depends on connections, of course. Bear in mind that none of the budget airlines offers any kind of guarantee for connections, so allow plenty of time for delays coming into and through London.