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Boeing Demands $4.5M From LAM, But Company Admits Only $729,000 Debt

Boeing Demands $4.5M From LAM, But Company Admits Only $729,000 Debt

Boeing is demanding 4.5 million dollars from Mozambican airline Linhas Aéreas de Moçambique (LAM) for alleged late payments on a parts supply contract, but the state-owned company only admits to a debt of 729,000 dollars, according to official documents quoted by the Lusa news agency on Wednesday, 10 January.

At issue is an invoice, sent to the airline on 20 December, under the parts supply programme, which provides for the shipment of replacement equipment for Boeing aircraft during repair periods, signed in 2014, but for which, in recent years, LAM has made no payments.

The invoice specifically charges 3.4 million dollars claiming that more than 30 items or parts sent to Mozambique, in a deal managed by Air France/KLM from Amsterdam, had not been returned or were returned late, without further details.

Of the 4.5 million dollar invoice, according to documentation to which Lusa had access, LAM recognises a debt of 729,228 dollars for the contract rents, which are in arrears, and has already proposed a phased payment to Boeing, which the US manufacturer refused.

In another document consulted by the news agency, from January, Boeing states that all the items or equipment supplied had already been returned, but the matter has since reached the General Inspectorate of the Mozambican Ministry of Transport and Communications, which has held meetings with LAM’s management.

The Mozambican company refuses to recognise the debt of almost 3.5 million dollars claimed by Boeing, with one source explaining that the alleged delays in returning the more than 30 items or equipment sent to Mozambique are the responsibility of the forwarding agents.

LAM also says that in recent years there have been delays of several months in the customs clearance of parts received in Mozambique, a situation that was overcome at the end of 2023 with a special authorisation issued by the government to simplify the process.

Another source from the company explained to Lusa that the debt claimed by Boeing comes at a time when Fly Modern Ark (FMA), which is revitalising the company, intends to use a credit of 23.5 million dollars from LAM to the US manufacturer (advances made by LAM from 2014 to 2019 for the purchase of aircraft), to go ahead with the purchase of a new aircraft for the Mozambican carrier, which is launching new routes and which exceeded 600,000 passengers in 2023.

However, Boeing refuses to release this money until the debt is settled by LAM, and also denies using this credit to pay the part of the debt recognised.

According to Lusa, this agreement for the supply of equipment by Boeing is customary for companies with a small fleet, as is the case with LAM, and allows the carrier to have access to 429 spare parts during the repair of equipment, against payment of rent.

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The executive director of the FMA, Theunis Crous, said on 14 September that he had found “situations of corruption” at LAM, the supply of services above market value and others without contracts, holding the directors responsible. “They ran the company the way they wanted,” he said at a meeting with journalists in Maputo.

The severe financial difficulties led the government to place the Mozambican flag carrier under the management of the FMA in April 2023.

LAM’s flight network covers 12 destinations on the domestic market and Johannesburg, Dar es Salaam, Harare, Lusaka and Cape Town on regional routes, operating more than 40 flights a day using one Boeing 737, three Bombardier Q400s, two Bombardier CRJ 900s and two Embraer 145s operated by subsidiary MEX-Mozambique Expresso.

In December, the new destinations Cape Town (South Africa) and Lisbon were launched. LAM intends to double its fleet of aircraft to at least 22 by 2027.

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