* Airspace reopens after wildcat air traffic control strike

* Spain declared first post-Franco state of emergency

* Govt will not allow repeat of air traffic chaos

(Updates with Deputy PM vowing no repeat of strikes)

By Paul Day and Teresa Larraz

MADRID, Dec 4 (Reuters) - Spanish airspace reopened on Saturday after a wildcat strike by air traffic controllers paralysed airports for a second day and the government declared its first state of emergency in the post-Franco era.

Spain’s Deputy Prime Minister Alfredo Perez Rubalcaba vowed there would be no repeat of the strike, which stranded passengers, hurt companies and damaged Spain’s image.

The government is pushing through tough reforms and spending cuts to rein in a deficit and ward off market fears it may need a bailout similar to that of Ireland. [ID:nLDE6B20HM]

“We will not allow a repeat of a situation like this. There will not be any problems over the Christmas holidays or after the Christmas holidays. That is the government’s promise,” Rubalcaba told a press conference.

More than 90 percent of the controllers had returned to work by Saturday evening, but it could still take up to 48 hours for air traffic to return to normal after Spanish airspace was reopened during the afternoon, he added.

Spain’s Socialist government called in the army to take over control towers and threatened legal action against individual strikers who are locked in a long-running dispute over pay and conditions with the state-run airports authority AENA.

Passengers camped out in airports across the country on Saturday as the unofficial strike action caused chaos and threatened to deepen Spain’s economic problems.

“This strike was extremely serious and had very damaging consequences,” Rubalcaba said. The government has not yet worked out the financial cost of the travel chaos.

Many airlines, including Spanish flag carrier Iberia IBLA.MC and Ryanair RYA.I, cancelled flights. Iberia hopes to restart most long-haul services by the end of Saturday.

The government had earlier declared a state of emergency, the first since the end of military rule with the death of General Francisco Franco in 1975.

The unofficial stoppage followed cabinet approval of changes to rules on the number of hours air traffic controllers can work per year and of a law allowing the army to take over air space in times of emergency.

Unions have also condemned plans to sell off 49 percent of AENA to raise up to 9 billion euros.

POPULAR REVOLT

Friday’s walkout disrupted travel for some 250,000 people on one of Spain’s busiest holiday weekends. [nLDE6B21VE]

“We arrived at the airport at seven in the morning and it was surrounded by military trucks full of soldiers and riot police. They offered to put us on the waiting list but warned us we wouldn’t be flying until Monday at the earliest,” Esther Rojas said in Madrid’s Barajas airport.

The controllers gave no warning before starting their walkout by claiming sick leave and leaving their posts, effectively closing the whole of Spanish airspace except the southern region of Andalucia.

The air traffic controllers’ union, USCA, said its workers were not on strike but had had enough. “This is a popular revolt,” USCA head Camilo Cela told Reuters.

Blanco condemned the strike as “blackmail” and there was widespread condemnation of the action in Spanish newspapers.

Tourism accounts for about 11 percent of Spain’s gross domestic product and the Spanish Hotel Confederation said the disruption would lead to millions of euros in losses and damage Spain’s image as a holiday destination.

Air traffic controllers’ relatively high salaries and short working hours have raised hackles in the Spanish media as the country is enforcing painful austerity measures.

Air traffic controllers earn more than 10 times a Spanish family’s average income of about 24,000 euros a year. (Additional reporting by Carlos Ruano; Writing by Alexander Smith; Editing by Peter Graff)