A Toronto-bound Air Canada plane has made an emergency landing at Madrid's international airport after pilots reported an engine problem and tire rupture shortly after takeoff.

The Boeing 767-300 carrying 128 passengers and eight crew touched down safely after circling southeast of Adolfo Suarez-Barajas airport for four hours "to use up fuel and lighten the aircraft for landing," Air Canada said.

The engine issue occurred shortly after takeoff in Madrid, the airline said in a statement. "A tire also reportedly ruptured on takeoff, one of 10 on this model of aircraft."

A spokesperson for Spanish airport operator AENA said the pilot radioed the tower about 30 minutes after takeoff to request a slot for emergency landing.

"Our pilots are fully trained for this eventuality," Air Canada said in an email." Nonetheless, an emergency was declared in order to obtain landing priority."

WATCH| 'There was a really loud bang.' Passengers describe emergency landing

Air Canada passengers describe Monday's emergency landing in Madrid after their flight's pilots reported an engine problem and tire rupture shortly after takeoff. 1:53

Spain's defence ministry said an F18 fighter jet had been dispatched from a military airport near the Spanish capital to evaluate the damage done to the landing gear of Toronto-bound Flight AC837.

A spokesperson for Enaire, Spain's air navigation authority, said the plane's landing gear did not fold up properly after taking off and that a piece of it may have damaged part of one of the engines. The official was not authorized to be named in media reports.

Engine issue likely triggered return to airport

Benoit Gauthier, a retired Air Canada pilot who flew for 37 years, said the tire rupture and engine problem are "most likely" connected.

"When a tire ruptures on takeoff, there's always a remote chance that it explodes and some part of the rubber ends up in the engine," he said in a phone interview.

The engine issue likely triggered the return to airport, while using up fuel makes for a lighter load on a plane that lacks the full power of its second turbine, he said.

"If you've lost an engine, you don't want to cross the Atlantic. You want to land," Gauthier said.

An Air Canada Boeing 767 aircraft is parked at Barajas international airport after making a safe emergency landing in Madrid, Spain on Monday. (G.W. Ortega/The Associated Press)

Guido Fioravantti, whose father was on the plane, confirmed the safe landing from New York.

"Landed safely, everything is OK!" Fioravantti said.

WATCH | Air Canada plane makes emergency landing in Madrid:

Toronto-bound flight made an emergency landing after engine and tire problems 0:35

All 136 people on board will be provided with hotel rooms and rebooked on other flights, Air Canada said.

Gilles LeVasseur, a professor of business and law at the University of Ottawa, said the airline is not obliged to compensate passengers further under Canada's new passenger rights charter.

"This is outside their control," LeVasseur said in a phone interview.

"It's not like if you made a failure or you didn't execute your proper maintenance," he said.

Tire blew, pieces got in the engine, the pilots did everything right and safely landed back in Madrid. Good work!<a href="https://t.co/8CSNKDhJat">https://t.co/8CSNKDhJat</a> <a href="https://t.co/m3hFkaHg3y">pic.twitter.com/m3hFkaHg3y</a> —@Cmdr_Hadfield

LeVasseur said Air Canada should review safety protocols for the tires and their manufacturer to avoid future ruptures.

Spain's El Mundo newspaper's website published audio it said featured the plane's pilot explaining to the passengers the need to return to Madrid because a wheel had been damaged during the takeoff.

"Because we are a bit too heavy we have to get rid of fuel before being able to land," the voice can be heard saying in Spanish.

Madrid residents posted videos online showing a plane flying unusually low over the Spanish capital's centre and suburbs.

It was the second incident of the day at Madrid's international airport, the busiest in the country. Earlier on Monday, the airport closed for over an hour due to the reported sighting of drones in the vicinity.