There are (at least) two ways to represent the accented letter é in Unicode: as a single code point U+00E9, LATIN SMALL LETTER E WITH ACUTE, and as a two-character sequence e (U+0065) followed by U+0301, COMBINING ACUTE ACCENT.
Your input file uses the latter encoding, which iconv apparently is unable to translate to Latin-1 (ISO-8859-1). With the //TRANSLIT suffix, it passes through the unaccented e unmodified and drops the combining character.
You'll probably need to convert the input so it doesn't use combining characters, replacing the sequence U+0065 U+0301 by a single code point U+00E9 (represented in 2 bytes). Either that, or arrange for whatever generates your input file to use that encoding in the first place.
So that's the problem; I don't currently know exactly how to correct it.