Ba'athist Iraq reducing international oil prices, further weakened the Iraqi economy. In response to this, Saddam threatened Kuwait that, unless it reduced its oil output, Iraq would invade. Negotiations broke down, and on 2 August 1990, Iraq launched an invasion of Kuwait. The resulting international response led to the Persian Gulf War, which Iraq lost. The United Nations (UN) initiated economic sanctions in the war's aftermath to weaken the Ba'athist Iraqi regime. The country's economic conditions worsened during the 1990s, and at the turn of the 21st century, Iraq's economy started to grow again as several states ignored the UN's sanctions. In
Kuwait Airways will encounter difficulty in advancing, especially in fleet renewal, without the privatisation. Flights to Iraq were resumed in ; Kuwait Airways had discontinued services to the country in 1990 following the invasion of Kuwait. After a 17-year hiatus, the carrier resumed flying to Munich in . Also in July 2015, the airline restarted flights to Istanbul-Atatürk; the city had not been served for three years. Bangalore was added to the carrier network in . Kuwait Airways is wholly owned by the government of Kuwait, . Privatisation started being considered in the mid-1990s, in a period that followed the Gulf War