Kuwait finalises $500 million airline settlement with Iraq 

(MENAFN - Arab Times) Iraq said on Tuesday that a 500 million settlement had been finalised with neighbouring Kuwait to end a decades-long dispute between the two countries' state-run airlines.

The agreement, which was not immediately confirmed by Kuwait, is the latest sign of warming ties between Baghdad and Kuwait City, after Saddam Hussein's 1990 invasion of Iraq's oil-rich neighbour.

Kuwaiti Foreign Minister Sheikh Sabah Khaled Al-Sabah told his Iraqi counterpart Hoshyar Zebari that Emir Sheikh Sabah al-Ahmad Al-Sabah signed a decree authorising the 500 million settlement, a statement posted on the Iraqi foreign ministry website said.

The statement said that the decree "cancels all restrictions and complications in rebuilding Iraqi Airways, and it is now free to buy new planes and build a fleet."

The decree was to be published in Kuwait's official gazette on Tuesday.
Iraq invaded Kuwait in 1990, after which flights between Iraq and its small neighbour to the south were suspended. Authorities earlier this year gave approval for direct flights between the two countries to finally resume.


During a visit by Iraqi premier Nuri al-Maliki in mid-March, Kuwait agreed to the 500 million deal with Baghdad aimed at ending a debt dispute that saw an Iraqi Airways flight impounded in London.

According to Kuwait Airways, Iraq's flag carrier owes it 1.2 billion as a result of the 1990 invasion. Kuwait says 10 of its planes as well as aircraft parts were plundered after its airport was seized during the invasion.
The dispute saw British authorities seize the passport of Iraqi Airways chief executive Kifah Hassan Jabbar and impound the plane which he flew to London in April 2010.

The incident marred Iraqi Airways' first commercial flight from Baghdad to London in 20 years.

Iraq and Kuwait in March reached an agreement under which Iraq will pay Kuwait 300 million in cash and invest 200 million in a joint airline venture in return for Kuwait lifting legal actions against Iraqi Airways.


"According to the decision all restrictions and difficulties rebuilding Iraqi airlines and on its freedom to buy new planes and establish its fleet will be lifted," the Iraqi Foreign Ministry statement said.

Iraqi Airways has regular flights to Middle Eastern destinations such as Beirut, Dubai, Tehran and Amman, but legal cases made it difficult to start flights to European destinations where it risked its planes being confiscated.