Fly Baghdad has begun assembling the pieces for a return to scheduled service after the United States removed the Iraqi airline and two of its Boeing 737s from its counterterrorism sanctions list.
The carrier says it is coordinating with civil aviation authorities, airports and commercial partners on a gradual restoration of its network. Its immediate recruitment of Boeing 737NG flight crews provides a further indication that preparations have moved beyond the corporate restructuring that occupied the airline during the sanctions period.
OFAC removes the airline and two aircraft
The U.S. Treasury Department’s Office of Foreign Assets Control deleted Fly Baghdad from the Specially Designated Nationals list on August 5, 2026. OFAC also unblocked Iraqi-registered aircraft YI-BAF and YI-BAN.
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Washington had designated the carrier in January 2024, alleging that it had assisted Iran’s Islamic Revolutionary Guard Corps-Quds Force and associated groups by transporting personnel and material in the region. The designation severely restricted access to banking, insurance, leasing, maintenance and other services involving U.S. persons or the U.S. financial system.
The August action did not remove former chief executive Basheer Abdulkadhim Alwan al-Shabbani from the SDN list. Instead, OFAC changed his listing so that it links him directly to the IRGC-Quds Force rather than to Fly Baghdad. Commercial partners can resume ordinary business with the airline, although dealings involving the sanctioned individual remain subject to separate compliance screening.
Fly Baghdad attributed its delisting to a two-year program covering governance, compliance controls and transparency. The airline has invited banks, lessors, insurers, suppliers and other aviation partners to resume working with it, a necessary step before a meaningful scheduled operation can be rebuilt.
Boeing 737 recruitment points to operational restart
Fly Baghdad’s most concrete operational move is a new recruitment campaign for Boeing 737NG captains and first officers based in Baghdad. The airline is offering renewable three-year contracts with an immediate start.
Captain applicants must have at least 5,000 hours of total flight time, including 500 hours as pilot in command on the 737NG. First officers require 2,000 total hours and 500 hours as second in command on the type. Recruiting current, type-experienced crews should shorten the path through operator conversion, recurrent training and checking as aircraft return to the line.
The 737NG is suited to the short- and medium-haul markets that formed the core of Fly Baghdad’s network, including Turkey, the Levant, the Gulf and regional Iraqi services. Concentrating initially on one cockpit type would also simplify crew rostering, training and maintenance during a measured restart.
Istanbul returns to the commercial foreground
The airline has not presented a full relaunch schedule, but its booking website is again promoting Istanbul, currently displaying a $235 roundtrip offer. Baghdad (BGW)-Istanbul (IST) is a logical route around which to restore commercial activity because it gives the airline a familiar, high-volume international market rather than requiring it to establish a new station during the initial phase.
Istanbul has played that role before. Fly Baghdad’s first scheduled international service departed for the Turkish city in October 2017, initially serving Istanbul Sabiha Gökçen. The airline later operated to the new Istanbul Airport and used Turkey as one of the anchors of its wider regional network.
Two airframes released from blocking sanctions
OFAC’s action specifically removed YI-BAF and YI-BAN from the blocked-property list. Treasury records identify YI-BAF as Boeing serial number 32412, manufactured on May 24, 2002, and YI-BAN as serial number 35064, manufactured on January 8, 2008.
Unblocking the aircraft removes a major obstacle to maintenance support, insurance and commercial transactions, but the airline still has to complete the technical and regulatory work required to place aircraft back into scheduled service. Fly Baghdad has said that route, timetable and operational announcements will be released through its official channels as the restoration proceeds.
Bottom Line
The sanctions removal gives Fly Baghdad a viable route back into Iraq’s scheduled airline market. Pilot recruitment, renewed commercial promotion and the release of two Boeing 737s show that the carrier is moving toward operations, though the scale of the first schedule will depend on how quickly it can reactivate aircraft and reconnect with suppliers.
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