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Aviaco (Aviación y Comercio SA) was a Spanish airline incorporated on February 18, 1948. It was founded when the National Institute of Industry proposed that the national carrier of Spain, Iberia, could not meet the domestic demand. This had been caused by the heavy commitment of Iberia to the lucrative South American market, especially Buenos Aires and Montevideo. However, the company faced increasingly intense competition from Air France, KLM and British South American Airways, which compromised its own domestic growth. Aviaco won the tender that permitted services on domestic routes that Iberia did not operate. The first aircraft were three freighters Bristol 170 and three Bristol 170 for passengers. Operations began in September 1948 between Bilbao and Madrid. 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. During the 1980s, most of Aviaco shares were acquired by its competitor Iberia. From that time, Aviaco ran the less important domestic routes while Iberia served the international destinations and the most important national routes, such as the shuttle service Madrid-Barcelona. All the Aviaco technical, marketing and financial resources were transferred to Iberia. During this time, Aviaco had a fleet of Douglas DC-9 planes, which were painted in blue and white livery. At the end of the 1990s Iberia reorganized all its group of companies and Aviaco operations were closed down in 1998. All its aircraft were repainted with Iberia's corporate logo. During its heyday, Aviaco ("AO") was well known for operating charter flights primarily from Palma, Tenerife and Girona to almost every provincial airport in Europe, providing uplift for all major tour operators, such as Thomson, Enterprise, Cosmos and ILG. In fact, ILG's combined operations (Intasun, Lancaster, Global and Sol) signed an exclusive deal with AO to operate charters from all UK airports not covered by its own Air Europe brand. Aviaco earned itself a bad reputation in the international travel sector; it became known for its old aircraft (DC-9's), mediocre service and delays. 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 to 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, A300's and even Boeing 747-200's 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. [edit] Incidents and accidents
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