Iraq’s national carrier found itself in a tight spot recently – the airline has been through several legal disputes over war reparations to Kuwait. Regional carrier Kuwait Airways claim that the state-owned Iraqi airline is responsible for over $1.2 billion worth of airplane parts and vehicles stolen during the 1990 Gulf War.

As Iraq has only just opened direct flights to Europe, the airline was previously unaffected by the complex legal dispute. However, after a team of Kuwaiti lawyers attempted to ground a plane at Gatwick Airport, the airline suspended all flights indefinitely and offered refunds to affected customers.

The state-owned airline is now filing for bankruptcy, unable to met its debt obligations and facing a three-year winding down period. Hundreds of jobs are at risk in Iraq, where the air travel industry is largely international, and approximately 20 employee positions could be at risk in Britain.

As a government operated company, the airline’s bankruptcy could cause issues for Iraq’s other government branches. The $1.2 billion debt represent a major blow to the nation’s economy – one that, up until now, had been operating without major international debts. It’s unknown whether those working for the airline from the UK will retain their jobs.