Plans for joint Iraq-Kuwait airline due by year-end

Plans for a joint Kuwait and Iraq airline, part funded using the compensation paid to Kuwait Airways for aircraft taken during Saddam Hussein’s invasion of the Gulf state, are expected to be finalised before the end of the year.

“A Kuwaiti-Iraqi technical team is currently working on preparing the formula, work mechanism and structure of the new company to be brought to life in the near future,” sources told the Kuwait Times.

Iraq’s Cabinet last month agreed to allocate US$500m to end the long-running dispute with Kuwait over the debts of Iraqi Airways. Kuwait Airways has been seeking US$1.2bn in compensation for ten aircraft taken during Iraq’s 1990 invasion of Kuwait.

Iraq in March said it had reached an agreement to pay Kuwait US$300m in cash and invest US$200m in a joint Iraqi-Kuwaiti airline venture. In return, Kuwait agreed to lift legal actions against Iraqi Airways.

Iraq said the long-running dispute had prevented its airline from flying to Europe without risking its planes being confiscated. In 2010 Kuwait’s lawyers tried to seize an Iraqi Airways plane on its first flight to London.

“This partnership raises many questions, not just about the viability of a joint Iraqi-Kuwaiti airline but also of struggling Kuwait Airways and Iraqi Airways,” said Saj Ahmad, chief analyst at StrategicAero Research

“While it may well succeed in operating, you could argue that the need for such a carrier is questionable and you have to wonder why the Iraqi and Kuwaiti governments didn’t opt to partner up their existing carriers,” he added.