The council of Ministers of Iraq has declared that Iraqi Airways has been declared insolvent and will cease flying. In its place, there will be two or three new entities created. The move is thought by analysts to be an attempt to avoid the $1.2 billion owed to the State of Kuwait for its losses (in materials and airframes) as a result of the invasion of Kuwait prior to the first Gulf War. The Iraqi Government says that it cannot be held responsible for earlier actions.
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