Kenya Airways (KQ)has suspended plans to launch scheduled flights to the Eritrean City of Asmara.
Kenya Airways Commercial Director Hugh Fraser said the action follows foreign currency restrictions imposed by the government of Eritrea on the Airline.
Fraser said the Airline will now instead route its flights to Djibouti via Addis Ababa in Ethiopia with two weekly flights.
Kenya Airways had scheduled to launch its inaugural flight to Asmara on May 2nd flying twice weekly on Tuesdays and Thursdays.
The plans have however been put on hold as negotiations continue to resolve the disagreement over the use of currency.
The Eritrean government is said to have insisted on Kenya Airways transacting its business in local currency as opposed to the international norms.
The Airline was also not expected to repatriate its dollars back to Kenya leading to the stalemate.
Meanwhile Kenya Airways has regained its frequencies to fly to Uganda after successful negotiations with the Ugandan government. The Airline will now make 4daily flights to Entebbe.
The flights were suspended last year after the Ugandan government protested at Kenya Airways dominance of the route.
However Uganda has been forced to restore the frequencies after failing to get an alternative airline to fly the route.
Kenya Airways is also soon expected to launch an inaugural flight to Cotonou in Benin connecting through Libreville in Congo.
Meanwhile Celtel and Kenya Airways have entered into a strategic partnership under which the two companies will jointly market their services across Africa.
Under the deal Kenya Airways will be guaranteed unconditional partnership in communications, marketing and air ticket discounts with Celtel operations in countries served by the Airline.
In return Celtel will be allowed to advertise and retail its products on board Kenya Airways flights while personnel will travel at discounted airfares.
Chief Executives of the two companies signed the deal witnessed by the chief Operating Officer of celtel International, Omari Issa.
