Kuwait Airways says It is owed $1.2 billion Iraq to dissolve national airline in Kuwait row

BAGHDAD (Agencies)

Iraq's government said on Wednesday it would dissolve state-owned Iraqi Airways over the next three years and pursue private options to dodge asset claims made by Kuwait over their 1990-91 war.

Transport Minister Amer Abdul-Jabbar said the cabinet had decided on Tuesday to dissolve the company, but that the process could take three years.

"Iraqi Airways will not stop in its work, and its employees will continue working," he told Reuters.

" 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 "

Iraqi transport ministry spokesman Aqeel Kawthar

"We have the idea of establishing other private companies -- there are three being established," Abdul-Jabbar said.

"We are considering establishing a public-private partnership, and ... another governmental company."

The move comes a day after the airline announced it was dropping its services to Sweden and Britain over the legal row with Kuwait, but it was not immediately clear if a new company would be formed to take its place.

"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," transport ministry spokesman Aqeel Kawthar told AFP.Kawthar said.

"The transport ministry will carry out the decision by the council of ministers, even though we disagree with it," he added, without giving details on whether a new company would be formed.

Kuwait Airways says Iraqi Airways owes it $1.2 billion, a dispute dating back to Saddam Hussein's 1990 invasion of the neighbouring emirate. Kuwait says 10 of its planes as well as aircraft parts were plundered after its airport was seized during the invasion.