I suggest you read the instructions on the MonoKote web site:
http://www.monokote.com/monoinst1.html

The iron is used to activate the adhesive backing to make the MonoKote stick to the plane and to itself. Then to remove wrinkles and shrink the covering tight, Top-Flite (the maker of MonoKote) recommends a heat gun, though it can also be done with the iron.

- Jeff