Imagineertobe,

Many thanks for your reply and advice, much appreciated.
We have also been recommended to claim compensation with Iberia for the following reasons.
AirEurope did provide alternative travel arrangements to ensure ontime departure/arrival.
Iberia is the marketing carrier for the codeshare flight (as printed on the boarding passes and written on the FIM) and therefore the selling party.
I'm going to double check with BA on denied boarding reason

I will provide updates on the progress