SA airline Airlink has grown weary of blocked funds from Mozambique with the company contemplating terminating ticket issuance in the country, which is said to have blocked about $200m [R3.5bn] in cash to several airlines.
This is as Mozambique struggles with foreign currency shortages, which now threaten regional movement.
Airlink is the only major airline connecting SA to Mozambique after FlySafair pulled out from that market, with SAA also not flying to the country.
The airline wrote to the Association of Travel Agents and Tour Operators in Mozambique, decrying the “persistent” difficulties in repatriating funds generated from ticket sales in the country.
“These challenges have placed considerable strain on our financial operations and have reached a point where they may compromise the sustainability of our commercial activities in the region.”
“Regrettably, we are seriously considering the termination of ticket issuance through local booking channels in Mozambique”.
“We understand the potential impact this decision may have on travel agents, passengers and the broader travel industry. Please be assured that this consideration is not taken lightly. Our team is actively exploring all possible avenues to resolve the situation in collaboration with all relevant authorities.”
Airlink provides vital scheduled air services between SA and Mozambique. The airline flies from Johannesburg to Maputo about 21 times a week, and four times a week from Cape Town.
The company also has seven flights a week from Johannesburg to Beira, three to Nampula, seven to Pemba and five to Tete.
Airlink also has seven flights a week from Johannesburg to Vilanculos and four from Mbombela to the same destination.
According to data from the International Air Transport Association (Iata), Mozambique has climbed up to the top of blocked funds countries, withholding $205m from airlines at end-April, compared with $127m in October 2024.
Iata urged governments to remove all barriers preventing airlines from the timely repatriation of their revenues from ticket sales.
“Ensuring the timely repatriation of revenues is vital for airlines to cover dollar-denominated expenses and maintain their operations,” Willie Walsh, Iata director-general, said in June.
“Delays and denials violate bilateral agreements and increase exchange rate risks. Reliable access to revenues is critical for any business — particularly airlines, which operate on very thin margins. Economies and jobs rely on international connectivity. Governments must realise that it is a challenge for airlines to maintain connectivity when revenue repatriation is denied or delayed.”
The blocked funds, which represent revenues earned by international airlines operating in these countries, remain inaccessible due to government-imposed foreign exchange restrictions or delayed currency conversion.
Airlink CEO de Villiers Engelbrecht said the company has had fruitful discussions with Mozambican authorities over the past few days.
“Since last week, there have been some encouraging developments, including high-level meetings with the relevant Mozambican banking and government officials as recently as yesterday [Monday] afternoon,” Engelbrecht said.
“On the basis of these good faith and frank discussions, we are optimistic that Mozambique’s authorities will swiftly provide a solution enabling Airlink to expedite the repatriation of its revenues generated from sales in that market.”
Several SA companies, including Standard Bank, Nedbank and Absa, have operations in Mozambique.
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