Qantas stops selling tickets in Zimbabwe

Qantas Airways told travel agents in Zimbabwe to stop selling tickets for its flights after the International Air Transport Association warned it's getting harder to move funds out of the country, according to a circular sent by the Australian airline to agencies and seen by Bloomberg.

The carrier is owed a "substantial" amount by Bank Settlement Plan Zimbabwe, the system that IATA uses to transfer local ticket revenue to airlines, according to the circular from Michi Messner, Qantas's regional manager for Africa. "We've been advised by IATA that the situation with the repatriation of funds out of Zimbabwe is worsening," she wrote.

Messner confirmed by phone from Johannesburg on Tuesday that she had sent the letter, referring further questions to IATA. The industry body wouldn't immediately comment.

The move is an early sign that airlines may be scaling back operations in the southern African country, which is battling a shortage of banknotes that's forced lenders to cap customer withdrawals and seen retailers offer large discounts for cash payments. Zimbabwe has mainly used the dollar since economic mismanagement and runaway inflation rendered its own currency worthless eight years ago.

Cash Is King in Mugabe's Zimbabwe as Dollar Supply Dries Up

Other international airlines flying into the country include Emirates, Ethiopian Airlines, South African Airways and Kenyan Airlines Ltd.

Civil Aviation Authority Zimbabwe is aware of the circular from Qantas, Managing Director Charles Chawota said by phone, adding that the currency shortage is a government issue.

International carriers including United Continental Holdings Inc. halted or suspended operations in Nigeria last year after that country's own shortage of foreign-exchange reserves made it hard to recoup revenue.

Zimbabwe travel agents may sell tickets for Qantas flights through a South African partner, according to the airline's letter.