Kuwait Airways will operate its last flight between New York City and London on Saturday, deciding last month to drop the route after about 35 years of service rather than transport Israeli citizens between the two cities.
The Transportation Department found in September that the airline's policy discriminated against Israeli citizens and ordered the practice to stop. Instead, the airline announced in December that it would drop the flights.
The decision does not apply to the airline's three weekly nonstop flights between Kennedy International Airport in New York and Kuwait City. Those flights are not affected because Israelis are not allowed to visit Kuwait and are not granted visas.
Passengers in transit through another country are another matter, according to the Transportation Department, which said that Kuwait Airways' refusal to carry Israeli citizens between New York City and London amounted to "unreasonable discrimination" because Israeli passport holders have the legal right to travel between the United States and Britain.
"An airline does not have the right to refuse to sell tickets to and transport a person between the U.S. and any third country where they are allowed to disembark based on the laws of that country," said Namrata Kolachalam, a spokeswoman for the department.
The Transportation Department said that it was also investigating two formal complaints with Qatar Airways and Saudi Arabian Airlines.
Kuwait Airways started flying to New York in 1980 three times a week, on Saturdays, Tuesdays and Thursdays, with flights stopping in London before continuing on to Kuwait City, according to a reservation agent from Kuwait Airways.
The unusual case stemmed from a complaint of an Israeli citizen, Eldad Gatt, who tried to book a flight in 2013 from New York to Heathrow Airport in London. When he tried to buy a ticket online, Kuwait Airways' booking system did not allow the transaction because of Mr. Gatt's citizenship.
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Lawyers for Kuwait Airways said in a petition filed in November that the airline's policy was based on Kuwaiti law, which prohibits domestic companies from conducting business with Israeli citizens. The airline, the lawyers stressed, did not discriminate against passengers holding a valid passport from a nation recognized by Kuwait and did not discriminate based on race or religion.
The lawyers say that courts in the United States have long accepted distinctions based on citizenship and that the United States also upholds similar restrictions on citizens of countries it does not recognize, like North Korea.
But those arguments were not accepted by the Transportation Department, and the matter attracted the attention of Transportation Secretary Anthony Foxx, who said that if the airline did not change course, the administration was "prepared to use all tools at its disposal to protect the civil rights of passengers."
It is not the first time that geopolitics has gotten entangled with air travel policy. In 2013, when Bill de Blasio was running for mayor of New York City, he criticized Saudi Arabia's national carrier for refusing to sell tickets to Israelis flying from New York. At the time, officials with the Saudi airline said that since Saudi Arabia did not allow visitors from Israel, the carrier could not fly them there, even for connecting flights.
A representative for Kuwait Airways could not be reached for comment.