Kuwait Airways, the Gulf state's national carrier, canceled flights for a second day in a row Sunday as it scrambled to cope with a strike by workers.
The action by Kuwait Airways employees follows a work stoppage by customs officials that began last week and is blocking truckloads of goods from entering the country. Workers are demanding higher pay and other benefits.
Kuwaitis are used to well-paying government jobs and a cradle-to-grave social security system that is increasingly becoming a burden on the state. Calls for better working terms have grown louder as the past year's Arab Spring uprisings reverberated across the region.
Kuwait Airways grounded its flights starting Saturday evening and extending into Sunday, according to airline spokesman Adel Boresly.
They affect incoming and outgoing flights on nearly two dozen routes including to regional hubs Dubai, United Arab Emirates, and Doha, Qatar, as well as Western destinations such as New York and Frankfurt, Germany. It is unclear when flights will resume.
"We are evaluating the situation (until) the strike is off," Boresly said.
Kuwait Airways operates a fleet of 17 jetliners and focuses mainly on flying to Middle Eastern, European and Asian destinations. It has struggled financially for years, in contrast to the turbocharged growth of regional rivals such as Dubai's Emirates.
Meanwhile, store shelves at some supermarkets are running empty as striking customs workers, who began walking off the job Tuesday, refuse to allow hundreds of trucks to cross the border.
That is prompting merchants to hike prices, with the cost of some goods such as dairy products, detergents and diapers rising significantly.
Oil exports do not appear to be affected by the customs strike.
Marzouq Awwad, secretary of the customs workers' union, vowed to continue the job walkoff until its members' demands are met. He said workers have allowed 97 trucks carrying perishable items such as fresh fruits, vegetables and dairy products to cross the border since the strike began.
"The union is not at war with the citizens, and is only on strike until the government and union reach an agreement," he said.
Power plant employees and university professors are also threatening to walk off the job unless they too get increased pay and retirement benefits.
Members of Kuwait's Cabinet are in talks with labor leaders to try to resolve the dispute. Finance Minister Mustafa al-Shamali has repeatedly said the country's budget is strained, and cannot afford the pay increases of as much as 40 percent that unions are calling for.
Thousands of customs workers and other civil servants launched a similar wave of labor unrest in September and October that temporarily disrupted shipping traffic and threatened the country's vital oil exports. Like in the latest strike, they were joined by Kuwait Airways workers.
Kuwait is OPEC's fourth largest oil exporter, and it relies on revenue from crude sales to cover the bulk of its budget.
Kuwaiti authorities have faced sporadic protests in recent months, though they have not been as big as the major pro-reform demonstrations seen elsewhere in the Arab World.
The small nation's parliament has the most powers of any elected body in the Gulf, and opposition lawmakers openly criticize the ruling family.
In January last year, Kuwait's emir, Sheik Sabah Al Ahmed Al Sabah, ordered 1,000 dinar ($3,559) grants and free food coupons for every Kuwaiti. Neighboring countries such as Saudi Arabia and Qatar followed with handouts of their own as they sought to dampen calls for political reform.
Schreck reported from Dubai, United Arab Emirates