In 1955, the airline's headquarters were transferred from Bilbao to Madrid, and the Instituto Nacional de Industria (INI) took over a majority interest in the company.

[5] In early 1964, the carrier signed a contract with Aviation Traders for the conversion of two of its DC-4s into Carvairs;[6] the first converted airframe was delivered in June the same year.

[7] By 1965, a joint Aviaco-Iberia board was set up to coordinate aviation policies, which ensured that Aviaco and Iberia routes did not compete with each other.

At this time, the carrier had 764 employees and the route network included Algiers, Alicante, Barcelona, Bilbao, Cordoba, Ibiza, La Coruña, Las Palmas, Madrid, Mahon, Málaga, Oran, Oviedo, Palma, Pamplona, Santander, Santiago, San Sebastian, Sevilla, Tenerife, Valencia and Vigo.

During the 1990s, the Asturias–London Stansted, Valladolid–Paris, Zaragoza–London Stansted and Zaragoza–Paris routes were added to the existing ones radiating from Madrid and serving Almeria, Badajoz, Barcelona, Bilbao, Fuerteventura, Granada, Ibiza, Jerez, La Coruña, Lanzarote, Las Palmas, Málaga, Mallorca, Menorca, Murcia, Oviedo, Palma, Pamplona, Reus, San Sebastian, Santander, Seville, Tenerife, Valencia, Valladolid, Vigo, Vitoria and Zaragoza.

[24] Iberia's shareholding in Aviaco was boosted from 33% to 100% in 1998,[25] when the Spanish flag carrier took control of 67% of the shares that were held by the SEPI.

However, the airline gained something of a cult status amongst travellers, who ultimately saw their Aviaco flight as part of the holiday experience.

During the mid-late 1980s, Aviaco sub-chartered aircraft from IBERIA to provide seasonal added capacity to its DC-9 fleet, which saw weekly forays of Iberia Boeing 727s, A300s and even Boeing 747-200s operating charter services on Aviaco's behalf into airports across Europe that had otherwise only handled 737 and DC9 sized aircraft up to that point.