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Fly Modern Ark: “LAM Is Minimally Balanced and Debt Tends to Decrease”

Fly Modern Ark: “LAM Is Minimally Balanced and Debt Tends to Decrease”

Sérgio Matos, Project Director at Fly Modern Ark (FMA), said that the national airline, Linhas Áreas de Moçambique (LAM), is minimally balanced in terms of service provision, adding that its debt is tending to decrease.

“LAM’s debt is falling, but not by as much as we would like. However, the real stage will be confirmed in next year’s audit,” he said during a press conference in Maputo.

According to Sérgio Matos, as a way of getting out of the “red” in the near future, it is important to increase the number of fleets, which will help to generate more revenue, explaining that “the company is healthy, but not very well. However, we are managing to fulfil our commitments more easily.”

“LAM is minimally balanced. There are companies that owe [payments], but many of them are already paying. At the moment, some work is underway to readjust the suspended contracts with the big companies,” he said.

Hired to operate for a period of 12 to 18 months, Fly Modern Ark’s mission is to restructure LAM in the face of the crisis it is facing, with an estimated debt of more than 300 million dollars. The South African company has been working with the national airline since 18 April this year.

Over the last few years, LAM has faced a series of operational problems related to a reduced fleet and a lack of investment, with some non-fatal incidents even recorded, associated by experts with inefficient aircraft maintenance.

An analysis by the Centre for Public Integrity (CIP), released at the end of the year, pointed to LAM as one of the technically insolvent companies in the state business sector, surviving on capital injections and state guarantees to respond to creditors, and as such representing a high risk to public debt.

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