Yemenia will halt six weekly flights to Jordan in October, Reuters reported, citing four airline officials.
Negotiations with the Houthis failed to secure the release of airline funds, estimated at $80 million.
Yemenia had proposed the Houthi administration take 70 per cent of the funds while the rest went to the internationally recognised government.
The airline decided to suspend flights to Jordan after the Houthi administration rejected the offer, the airline officials added.
Yemenia said in a statement that it had been unable to withdraw its funds in Sanaa banks for several months and called on the Houthi authorities to lift restrictions “illegally” imposed on its assets.
Yemenia had resumed flights from Sanaa to Amman, Jordan's capital, in April 2022.
The Houthis, aligned with Iran, ousted a Saudi-backed government from Sanaa in late 2014, and have de facto control of north Yemen, including Sanaa.