Mozambique’s government acknowledged on Sunday that it would pay euroAtlantic $3 million (€2.6 million) for cancelling the contract with state-owned Linhas Aéreas de Moçambique (LAM), but less than the compensation demanded by the Portuguese company.
“It has to do with a contract with euroAtlantic, which provided services on the Maputo-Lisbon route, which the government assessed the situation, as part of the restructuring [of LAM], and we decided to terminate the contract. And as part of the cancellation of the contract, obviously the company that had a contract with the state, with LAM in this case, asked for compensation of $21 million [€18.5 million],” said the Minister of Transport and Logistics, João Matlombe.
Questioned by journalists, the minister confirmed that the government has a team analysing the contract and has “come to the conclusion” that the amount requested by euroAtlantic is “too exaggerated”.
‘And the amount, more or less, of notice, which is the obligation when the contract is cancelled, is around $3 million. So that’s the amount we have on the table, but the teams are still working,” added João Matlombe, acknowledging that “there are still accounts to be settled” between the two companies, including invoices that “have been paid” by LAM and that “the work has not been carried out”.
euroAtlantic Airways (EAA) announced on 27 February that it had terminated its contract with LAM with “immediate effect”, citing the Mozambican carrier’s failure “to pay its substantial financial debts” and promising to take action.
“EAA remains committed to protecting its commercial interests and will take all the legal and commercial measures necessary to ebsure the conclusion of the current contract,” reads the Portuguese company’s statement, sent to Lusa at the time.
At issue is LAM’s link between Maputo and Lisbon, which used to be provided by euroAtlantic aircraft but was suspended on 19 February by the Mozambican state company.
“EAA, which began operating this route for LAM in December 2023, was only informed of the sudden suspension of all services on this route on 11 February 2025,” noted the carrier.
Quoted in the document, euroAtlantic’s chairman, Stewart Higginson, said that the Portuguese carrier trusts “that LAM will settle its outstanding financial obligations with the utmost urgency”.
“However, we naturally remain available to support LAM in the future as the situation evolves, and we look forward to strengthening the relationship that both parties have built over the past few years,” he added.
On 18 February, LAM announced the suspension of the Maputo – Lisbon route from the following day, stating that since 2023, the company has accumulated losses of more than $21 million (€18.5 million) due to the operation.
“As long as the house isn’t organised and we continue to have irregularities on domestic flights, we can’t fly big,” said Alfredo Cossa, LAM’s spokesman, at a press conference in Porto.
Abandoned by the company for almost 12 years, the Maputo – Lisbon route was resumed on 20 November 2023 and was part of the operator’s revitalisation plan, after the South African company Fly Modern Ark (FMA) took over LAM’s management in April of that year for a restructuring process.
Transport was provided by a 302-seater Boeing 777, resulting from a partnership with Portuguese operator EuroAtlantic. However, according to LAM’s spokesman, the company’s new Board of Directors concluded that the operation was unviable.
“We fuelled this route based on funds from the domestic market. We produced and paid for it, and at this point we can no longer afford it,” added Alfredo Cossa.
In addition to the Maputo-Lisbon route, LAM also suspended the connection between the Mozambican capital and Harare in Zimbabwe and Lusaka in Zambia, which were also unsustainable.
Lusa
