"We are sorry to announce to our fellow citizens, especially the communities living in Britain and Sweden, that Iraqi Airways will stop flying to these two countries because of difficult circumstances as a result of Kuwaiti escalation," airline chief Kifah Hassan Jabbar said in a statement.
Jabbar had his passport seized and the plane he arrived on impounded at London's Gatwick Airport on April 25th as a dispute with Kuwait Airways marred Iraqi Airways's first commercial flight from Baghdad to London in 20 years.
The 10-hour flight had arrived in London after stopping in Malmö in Sweden carrying 30 foreign and Iraqi passengers on board, including Jabbar and Iraqi Transport Minister Amer Abduljabbar Ismail.
There have been no further flights to either country.
Iraqi Airways had been planning to run two flights a week, with the Baghdad-London leg stopping off in Malmö, and the return trip going directly from the British
capital to Baghdad.
Kuwait Airways says Iraqi Airways owes it $1.2 billion, a dispute dating back to Saddam Hussein's invasion of Kuwait in 1990. According to the emirate, 10 of its planes as well as aircraft parts were plundered after its airport was seized during the invasion.
Jabbar's passport was eventually returned and he was allowed to return home on May 6th after he complied with the court order to provide Kuwait Airways with an affidavit of Iraqi Airways's assets in Britain.
"We hope that our fellow citizens understand this decision," Jabbar said.
"Politicians have kept their mouths shut and decision makers have not stood up to face the consequences of the ex-regime, which has put us in this situation."