Dubai: Iraq has begun to set up a new airline to replace state-owned Iraqi Airways which Baghdad has dissolved.
Iraqi Airways was shut down over a decades-old financial dispute with neighbouring Kuwait, a well-informed Iraqi source said yesterday.
However, it is thought that the financial battle with Kuwait is not over.
"We are already in the process of establishing a new company," the Iraqi source told Gulf News, speaking on condition of anonymity.
"Iraq has the right [to do so] ... The new company is going to be established on a public-private partnership basis," he said.
Asked if the new entity would be up and running before the end of the year, the Iraqi source indicated they hope so.
He said: "Surely, surely, surely before the end of the year, because [we are] already in the process."
The Iraqi government said the financial dispute over Iraqi Airways began during the 1990 Iraqi invasion of Kuwait.
Kuwait has demanded $1.2 billion (Dh4.4 billion) in reparations from the airline for its alleged theft of 10 planes and million of dollars worth of spare parts during the invasion. Kuwait had sought to freeze the company's assets.
Iraq's "cabinet decided [Tuesday] to wind up the Iraqi company," Transport Ministry spokesman Aqeel Kawthar reportedly said.
"The decision was taken because of the numerous acts of harassment that the company has faced from Kuwait that have prevented its planes from taking on fuel and food at various airports," Kawthar said.
Grounded
Iraqi Airways is one of the oldest airlines in the Middle East. It was established in 1945, and started operations in early 1949. All but two of its current fleet of 13 planes are rented. The company was affected by UN sanctions on Iraq imposed shortly after Iraqi troops invaded Kuwait in August 1990. The company's 17 planes were grounded and moved to Jordan on the eve of the 1991 war.
