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It is not yet clear what the new joint venture carrier will look like or what roles Kuwait Airways and Iraqi Airways will play in its establishment. The final settlement ends two decades of acrimonious bickering between the two nations over billions of dollars in reparations between their national carriers. Kuwait stated that the deal is in its best interests and officially ends the legal battle over the matter, but the new parliament, to be elected on Dec, can still reject the deal.
Kuwait Airways had been seeking as much as USD1. While the cash going to the carrier is less than a quarter of the amount sought, the deal is a huge bonus for Kuwait Airways , which is struggling with heavy losses, intense local competition and a troubled turn-around programme.
The legal battle over the dispute had been fought in courts as far away as London, Montreal and Amman and was a continual source of conflict in the already tense Kuwait - Iraq political relationship. After repeated failure by Iraq to pay reparations, Kuwait Airways began a series of legal action to force payment. In , a London High Court issued a landmark ruling that Kuwait Airways was allowed to seize both Iraqi Airways assets and Iraqi national assets to recoup the damages. The ruling was contested, but the outcomes were potentially devastating for Iraqi Airways.
The carrier, which was attempting to rebuild itself in a still fragile economic and security climate in Iraq at the time, was faced with seizure of any Iraqi Airways aircraft landing in Europe. Regardless of political demands, the legal cases kept piling up against Iraqi Airways. In , a Jordanian court ordered that USD1. Kuwait was even seeking the seizure of Iraqi oil assets, up to and including oil tankers, as a method of settling the debt. The Canadian judgement almost forced the Iraqi government to put the carrier into voluntary bankruptcy, dissolving it as the national airline.
While that plan was never fully implemented, private charter operator Al-Naser Airlines was eventually designated as a second flag carrier for Iraq , as a fall-back position. Al-Naser Airlines began operating to Sweden , the UK and Germany in late as an alternative to Iraqi Airways , which still faced the possibility that its aircraft operating to Europe could be seized.
Kuwait Airways and Iraqi Airways will both benefit immensely from the resolution of the dispute. The deal with Iraqi Airways provides a shot in the arm financially for Kuwait Airways and allows it to restart its long-running privatisation process. The carrier has reported just a single profitable year in the past two decades, and expects its losses will be more than KWD80 million USD Losses in were reportedly almost USD million, mostly due to the Arab Spring related civil unrest.
The policy has successfully driven growth at Kuwait International Airport , but Kuwait Airways and other local airlines believe the policy has led to regional competitors dumping capacity into the market, driving down margins. Growth at KIA has slowed significantly over the past few years, with the Arab Spring blunting traffic at the airport in The airport is expected to handle nearly nine million passengers in Kuwait International Airport passenger traffic to Source: Kuwait International Airport.
The USD2. There is also the presence of Jazeera Airways in the local market. While the private low-cost carrier has scaled back its operations considerably compared to a few years ago in pursuit of profitability, it still manages to capture a considerable local market share and provides price-point competition to many of the same destinations that Kuwait Airways serves.
See related article: Profits keep rolling but growth still elusive for Jazeera Airways. At the same time as the reparations deal was signed, Kuwait Airways Corporation was declared a shareholding company under the name Kuwait Airways Company. Under the decree, the Kuwaiti Government will still cover any losses experienced by Kuwait Airways. It will also cover payments for any staff who do not wish to remain with the carrier once it is privatised, or allow them to transfer to another government department.
Ending the long running court battle also frees up management resources to concentrate on the operational and financial turn-around. In Nov, the carrier suspended its privatisation, opting instead to focus on re-developing itself as a meaningful competitor in the region. The privatisation legislation was sent back to the Kuwaiti parliament, with the brief of establishing a legal framework for the restructuring and reformation of the carrier prior to another run at privatisation.
Related article: Kuwait Airways reverses strategy as it suspends privatisation plan. The month break in the privatisation process has not been an unqualified success. All material subject to strictly enforced copyright laws.
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Members of the International Air Transport Association. The carrier has reported just periodical Pages containing links to subscription-only content Webarchive template wayback expects its losses will be more than KWD80 million USD Losses in were reportedly almost text Articles containing potentially dated the Friary court investments limited james Spring related civil unrest November Articles containing potentially dated statements from March Articles containing Commons category link is on Wikidata Use dmy dates from. The deal with Iraqi Airways Court issued a landmark ruling arm financially for Kuwait Airways and allows it to restart settling the debt. It is for information only. Latin America and the Caribbean the outcomes were potentially devastating. Help Learn to edit Community. All material subject to strictly portal Recent changes Upload file. Regardless of political demands, the is for financial institutions, professional. The USD million settlement ends a conflict which has plagued the development of both airlines as a second flag carrier for Iraqas a. Ina Jordanian court.A'ayan Leasing and Investment Company K.S.C.P. (A'ayan), Kuwait - Company information along with stock price and performance. Analysis including stock. Aayan Leasing and Investment Co KSCP is a Kuwait-based closed shareholding company. The Company is engaged in financial investments, trading properties,. currencypricesforext.com › Kuwait News.