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Business of…Kuwait Airways

With Kuwait Airways’ stake sale likely to be the first privatisation of a Gulf-owned carrier (if anyone actually shows interest), Kipp looks at what could have happened that has led the airline to its downward spiral.

August 4, 2011 11:50 by

Iraqi Airways Controversy

The dispute between KAC and IAC (Iraqi Airways Company) started in 1990 following the invasion of Kuwait. During the Iran–Iraq War, Kuwait Airways was the target of two hijackings. The first was a London to Karachi flight in December 1984. The stand-off took six days but finally Iranian security officers dressed as staff overpowered the hijackers.

The second was in April 1988 when a Kuwait Airways Boeing 747 was hijacked and diverted to Algiers while on its way to Kuwait from Bangkok. The hijacking lasted 16 days and ended with a Kuwaiti firefighter being killed along with another Kuwaiti military person.

In 2008, the friction lives on as Kuwait Airways obtained a seizure order against Iraq and Iraqi Airways interests in a Bombardier aircraft in Canada. The following year, an appeal by the Iraqi government against Kuwait Airways’ claim over its aircraft during the Iraqi invasion of Kuwait had been summarily dismissed by a Canadian court of appeal. Kuwait Airways also won the legal battle with Iraqi Airways after a Canadian court ruled unanimously that Iraq cannot rely on state immunity to stop Kuwait from trying to seize Iraqi assets in Canada, including Bombardier aircraft.

More recently, in May 2010, the Iraqi cabinet tried to dissolve state-owned Iraqi Airways amid a row with neighbouring Kuwait over war reparations. This was after Kuwait’s national airliner demanded $1.2 billion in reparations from the airline for the alleged theft of ten airplanes and millions of dollars worth of spare parts. Iraqi Airlines will continue to operate until it is fully dismantled.

 

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