Kenya Airways issues warning about trapped funds in Malawi, could cut operations

Kenya Airways (KQ) has suspended its ticket sales to Malawi due to challenges in repatriating funds from the East African country.

KQ said in a statement released on December 16, 2022, that the suspension will only affect reservations made in Malawi and that travelers are still able to book and buy tickets through its website. However, the airline also warned that failure to repatriate the funds would lead to the suspension of its operations in Malawi.

“KQ has, throughout the year, actively engaged Malawi authorities to find a solution for the repatriation of significant amount of its blocked funds,” the airline explained.

“However, KQ has found it challenging to meet its operational costs and maintain the commercial viability of its operations in Malawi,” the airline added.

While Kenya Airways stated that it intended to continue operations in Malawi, which commenced in 1977, the airline also called on the Malawian government to put “mechanisms” in place to avoid the accumulation of trapped ticket revenues.

Trapped ticket revenue sales in Africa
Throughout 2022, airlines operating to some African countries have either threatened to or have halted operations due to trapped ticket sales revenues. This includes Gulf carrier Emirates, which suspended operations to Nigeria in early November 2022 over issues in repatriating ticket revenues from the country.

International Air Transport Association (IATA) regional vice president for Africa and the Middle East, Kamil Ala Wadhi revealed that up to $1.1 billion in ticket sales revenue was estimated to be trapped in Africa, according to a report by Nigeria’s The Will.

In the report, Wadhi said that Nigeria accounted for an estimate of $550 million in trapped revenues despite an intervention by the Central Bank of Nigeria (CBN) to release up to $425 million.