The government plans to achieve operational stability for Mozambique Airlines (LAM) in three years, after selling state shares in the company to public companies, due to its high level of debt.
The figures presented by the Minister of Transport and Logistics, João Matlombe, in Parliament, where the government is briefing MPs, show that in 2021 alone, the flag carrier recorded a loss of just over 1.4 billion meticals (21.7 million dollars), in 2022 with 448.6 million meticals (6.9 million dollars), 2023 with 3.9 billion meticals (60.5 million dollars) and 2024 with a record of 2.2 billion meticals (34.1 million dollars).
According to Matlombe, the government opted to keep LAM under public control, involving strong companies from the state business sector, after also evaluating privatisation and partnering with a strategic investor to operate the company. ‘The studies show that with adequate investment and firm restructuring, LAM could achieve operational and financial stability within three years.’
In the same speech, he rejected the idea that LAM’s current losses are a consequence of the management of the South African company Fly Modern Ark (FMA), which joined the company in April 2023 for a restructuring process that ended in September last year.
‘The losses recorded reflect many years of accumulated difficulties, and the negative results cannot be attributed solely to the management of Fly Modern Ark,’ said the minister.
‘During the management of the South African company, flights were reintroduced and the Beira/Johannesburg/Beira link was established, including the acquisition of a cargo ship. These actions had a negative impact on the company’s operational performance,’ he said.
He concluded that ‘delaying and cancelling flights, as is happening, cannot be part of the normality of a country that aspires to development, and that is exactly why we need to be upfront about the need for change’.
For several years now, LAM has been facing operational problems related to a reduced fleet and a lack of investment, with a record of some incidents, not fatal, associated by experts with poor aircraft maintenance.
In February, the government announced that it would sell 91 per cent of the state’s shares in Mozambique Airlines through private negotiation. The government also authorised the public companies Empresa Moçambicana de Seguros (EMOSE), Caminhos-de-Ferro de Moçambique (CFM) and Hidroeléctrica de Cahora Bassa (HCB) to acquire the state’s stake in the airline.
After another session of the Council of Ministers, Inocêncio Impissa revealed that the estimated amount to be raised from the sale of the state shares, around 130 million dollars (approximately 8.3 billion meticals), will be used to purchase eight new aircraft and to restructure the company.
When the FMA took over management of the state-owned airline, it recognised that it had an estimated debt of around 300 million dollars, and in the course of its work, the South African entity denounced schemes to embezzle money at LAM, with losses of more than 3 million dollars, in ticket shops, through automatic payment terminal machines (TPA/POS) that do not belong to the company.
The Central Office for Combating Corruption (GCCC) opened a case to investigate alleged corruption schemes in ticket sales at the Mozambican airline and in the management of the company’s fleet, and seized various materials.
