Air Zimbabwe has been suspended by the International Air Transport Association (IATA) over unpaid debt.
Mugabe is a frequent flier on Air Zimbabwe
The move means the carrier can no longer book its passengers onto onward flights with other airlines.
Air Zimbabwe owes IATA, which acts as a clearing house between members, $1.3m for tickets booked with other airlines.
The company is the national carrier of Zimbabwe, which is facing an a severe economic crisis - with acute shortages of hard currency, gasoline, and food.
The airline said efforts to raise the money were "at an
advanced stage" and apologised to travellers for any
"Over the past 12 months, Air Zimbabwe has been facing
problems procuring foreign currency to meet its foreign
currency-denominated commitments," the company said in a
Last year, foreign airports threatened to impound Air
Zimbabwe equipment if it did not pay outstanding landing and
Zimbabwe pulled out of the Commonwealth in December, after the body extended its suspension over allegations of widespread human rights abuse.
The whole Zimbabwe economy is in crisis
The country's economy has been in chaos since President Robert Mugabe won a Presidential election in 2002 that the opposition says was stolen.
The International Monetary Fund is beginning procedures to expel the country from its ranks.
Last month three Zimbabwean journalists were arrested for alleging that President Mugabe had commandeered an Air Zimbabwe plane, leaving passengers stranded.
The journalists have since been freed on bail by a Harare court.