January 27, 2006: Austrian Airlines has commenced bi-weekly flights to the Iraqi city of Arbil, making it the only European carrier to operate a scheduled service to the country. The services would be operated on every Monday and Friday, with return flights on the same day.

The carrier services will be operated between Vienna and Arbil. The city is the fourth-largest city in Iraqi, and is located towards the northern part of the Kurdish-controlled country.

With this Austrian Airlines has opened up an important connection for the economic reconstruction of the country. With United Nations planning to set up an operational base in Arbil, the city is becoming an important destination on the air route of the country, the airline said in a release here today.

The carrier has been facing financial difficulties and had recently reduced the number of flights to Asian destinations. It had also some of its aircraft, even as industry sources were expecting it to slash about 1,000 jobs to save nearly $51 million annually starting in 2009.

Austrian Airlines had earlier in January 2006 announced launching of regular flights to Arbil, which is considered as the capital of the country's Kurdistan region. The carrier cancelled its plans a month later, citing "security concerns".

It was also the first European carrier to start services to Sarajevo and Pristina in the wake of the war in former Yugoslavia. It was also the first Western carrier to resume service to the former Yugoslavia after the end of the 1990s Balkans wars.

Iraq's airline industry has been long grounded by sanctions, no-fly zones and lack of funds, but is experiencing a boom during the past of months. More and more airports are being opened up, which were closed during the US invasion of the country.

Baghdad, the capital of the country is still to open up for completely for international air travel. Compared with this, Kurdistan is "peaceful" and the northern part of the country is now completely free the turbulence that Iraq experienced after the fall of Saddam Hussein.

Meanwhile, Melbourne Airport will lose its only European-based airline in March as Austrian Airlines is planning to pulls out. The flag is planning to restructure its long-haul fleet and Melbourne was among those that lost services.

Austrian Airlines' decision is expected to hit the operations of the airport drastically, which is already witnessing a drop of around 5 lakh international seats since 2005.

Austrian Airlines is the flag carrier airline of Austria, with its headquarters in Vienna. The carrier has its main base at Vienna International Airport (VIE). The carrier was founded on September 30, 1957, and had made its maiden flight on March 18, 1958, operating a Vickers Viscount 779 to London.