The announcement of the South African company selected to take over the management of Mozambique Airlines (LAM) continues to divide opinions in the country. The Government revealed a few days ago, through the Minister of Transport and Communication, Mateus Magala, that Fly Modern Ark, was the consultancy company elected to work with the current management of LAM with a view to improving the value of the company, within a minimum period of six months and a maximum of one year.
Elcídio Bachita, an economist and professor at the University of São Tomás de Moçambique (USTM), told newspaper Diário Económico (DE) that the arrival of this international manager, who by the way started his activities on Tuesday, 18 April, will allow for greater transparency in the operational and financial management of the company itself. In the economist’s opinion, the measure will put the company in a position of sustainability and improvement of asset indicators.
“I think it was a very positive strategy that is being adopted by the Ministry of Transport and Communications. The new manager will make it possible to reduce operating costs which will make the company sustainable in the medium and long term as well as improving the repayment of its debt which is currently estimated at over US$300 million,” said the economist.
More than just putting the national airline at a satisfactory level of sustainability, Bachita sees the new management as an added value from an operational and economic point of view.
“I believe that this will have a positive impact on the company’s cash flow and also on the country’s economy, particularly with regard to tourism. Also, the company may have greater recognition at an international level, as I believe it will acquire new aircraft and that will guarantee some security for passengers that may travel outside the country as well as to different parts of the country,” he said.
In turn, business management specialist Pedro Saulosse welcomed Fly Modern Ark’s entry into LAM’s management, although he did not foresee any major impact on the consumer. “It is not expected that there may be some innovation regarding the prices applied by the national airline, since, being a private manager, it will want to ensure the return on its investment in a short space of time,” explained the manager.
However, the specialist warned of the need to understand the real objectives of the South African consulting company in this agreement. For Pedro Saulosse, the entry of this new manager in Mozambique Airlines may mean the harbinger of a pre-sale agreement of the company, or in other words, “there may have been a public-private partnership agreement so we are not in a scenario where the government hopes to take back the management of LAM itself.
“We have to understand that a private individual who comes with intentions of rescuing a national company, perhaps the agreement could be of a public-private partnership, because it does not seem to me that the Mozambican Government wants to dispose of LAM completely,” Pedro Saulosse annointed, to then stress that: “I think it is more or less a pre-sale agreement, because no international businessman who is in the aviation area is going to bid to manage something that is later to be returned to the Government.”
In this regard, a study released by the Centre for Public Integrity (CIP) last week revealed on the need for the Government to clarify the criteria that culminated with the selection of the South African consultancy firm to manage LAM.
The CIP study also pointed out that South African Fly Modern Ark, does not have some experience in airline management, as it was even ruled out in 2017 by the Zimbabwean Government, after it submitted a bailout proposal that had its shareholding in return.
Commenting on the study, Pedro Saulosse believes that the consultancy may have ventured into this business with the aim of taking dividends, as it will operate in an activity that has the full protection of the Mozambican state.
“If this company has no management experience in aviation, I believe that it ventured in knowing that here it will have total protection from the Government to be able to operate in a short term with the purpose of obtaining financial gains. Therefore, there won’t be many changes,” he concluded.
