The company was founded on February 18, 1948, located at no. 1 of the Buenos Aires street of Bilbao and a capital of 100 million of pesetas. Its first president, Elias Ugartechea Isusi from December 1946 had permission to perform non-scheduled domestic air services, which transferred to the new company.

On May 1st, 1948 Aviaco received its first aircraft, three Bristol 170 Freighter Mk 21, which started operations from Bilbao to Madrid and Barcelona. In 1949 Aviaco establishes his base of operations at the airport of Madrid-Barajas starts Canary Islands routes, Alicante and Badajoz and also joins in IATA.

In 1950 is named president Jose Pazó Montes, added 9 aircraft SE.161 Sud-Est Languedoc and create routes Madrid-Sevilla-Jerez, Madrid-Lugo-Santiago de Compostela, Madrid-Alicante-Oran and Barcelona-Brussels- Amsterdam. In 1951 starts the routes of the Cantabrian coast, initially covering correspondence Madrid-Lugo-Santiago de Compostela, Bilbao-Zaragoza-Barcelona, ​​which later split into several sub-paths, and also created the Bordeaux and Bilbao-Madrid-Vitoria.

During the 50’s, Aviaco create routes from Madrid to the newly created airport of Granada, San Sebastian, Asturias and Santander. To meet all this demand for routes added to its fleet of de Havilland DH114 Heron, Fokker F-27 and Convair 240/440 Metropolitan. Aviaco thus became the key to creating airlines with new airports were built in Spain. In 1954 the National Industrie Institute purchase half plus one of the company, joining the following year all the staff at the pawnshop of Loreto. In 1959, Aviaco became a subsidiary of Iberia, becoming its director Carlos Rodriguez Teixidor.

In 1960 he added to the company Caravelle airplanes. In 1971, named president of Aviaco Tomas Maestre Aznar, while Joaquin Abril Martorell is appointed managing director. In 73 the INI acquires 67% of the capital, naming Aviaco president Fernando Linan. In 1975 it had 27 aircraft Aviaco (6 DC-8, 4 Caravelle, 12 DC-9, and 5 Fokker F-27). In 76 Manuel Ortiz was named president, replaced the November 7, 1978 by Felipe Cons, which in turn was replaced in 1980 by Lorenzo Olarte, who in turn was in 1982 by Carlos Espinosa de los Monteros.

In the Years 1980 Aviaco was dedicated to charter flights (which ceased to make since the creation of Viva Air in 1988) and to carry out regular domestic flights to secondary airports and tertiary operations with Fokker 27 (especially in the Canary Islands inter-line and Balearic Islands), while Iberia routes serving major national and international destinations. Iberia took over all services to Aviaco, administrative, commercial and technical.

In the late 90’s Iberia carried out a reorganization of its group. Aviaco began to operate jointly its codeshare flights IB / AO since 1997, and finally disappeared as Aviaco marks the September 1, 1999, all aircraft being repainted with the colors of Iberia.