The Swedish Transport Agency (Transportstyrelsen) said in a statement that the airline did not meet necessary safety standards required within the European Union.
The ban was to take effect immediately, said the Transport Agency, meaning potentially leaving those who have already booked tickets to travel back to Sweden from Iraq stranded.
“A very troubling situation of course arises for those people who have both booked tickets and counted on flying home with the company,” Simon Posluk, departmental head at the agency, said on Wednesday.
“You have to have complete sympathy for that, but at the same time you need to respect that the company does not meet safety requirements to fly to and from EU countries,” he added.
Iraqi Airways had applied for a so-called TCO authorization (third country operator), a permit required for airlines based outside of the EU but operating traffic in one or more member states.
But according to the European Aviation Safety Agency (EASA), which manages airline safety across Europe, Iraqi Airways does not meet the safety requirements, which prompted the Swedish Transport Agency to withdraw the carrier's permit to fly in and out of Sweden on Wednesday.
“The Transport Agency's decision to recall the traffic permit is based on EASA's assessment. An airline that is not considered to meet these requirements is no longer allowed to fly to and from Sweden,” said Posluk.
Last year 18,329 people flew in and out of Sweden with Iraqi Airways.