The debt of Mozambique’s airline, Linhas Aéreas de Moçambique (LAM), increased by 0.5% in the third quarter of 2025, reaching €79 million, according to the latest public debt bulletin released by the Ministry of Finance, reported Lusa.
The increase represents an additional €437,800 compared to the previous quarter, resulting from new delays in payment installments. In the second quarter, the company’s debt had decreased by 2.4%.
In response to the company’s deteriorating financial situation, the Government approved a resolution on 2 September 2025 authorizing the payment of LAM’s annual debt installments, guaranteed by the State through commercial banks. The same resolution assigns the Institute for State Equity Management (IGEPE) the responsibility of establishing a special-purpose vehicle to manage and settle this liability.
The new financial structure will involve Hidroeléctrica de Cahora Bassa (HCB), the Ports and Railways of Mozambique (CFM), the Mozambican Insurance Company (EMOSE), and LAM shareholders. Its main objective is to secure funding to acquire a stake in the airline, which is undergoing a restructuring process.
LAM closed the 2023 fiscal year with losses of €53.5 million, forcing the State to inject €13.7 million in additional installments. In October 2024, IGEPE issued a comfort letter reaffirming the State’s commitment to provide the resources necessary for the company to meet its obligations.
Despite operational difficulties, LAM’s service sales revenue increased by 4% in 2023 compared to the previous year, reaching €118.7 million. However, this growth was insufficient to curb the worsening financial imbalance.
The airline ended the year with negative equity of €265 million, up from €225.8 million in 2022. Current assets also fell short of current liabilities, with an estimated shortfall of €251 million.
According to the most recent financial statements, the company’s continuity is at risk. The board of directors presented shareholders with several reports on the severity of the situation and proposed short- and medium-term measures to try to ensure the airline’s viability.
Among efforts to restore operations, LAM has invested in fleet renewal. In December 2025, it received a new Airbus A319 with a capacity of 148 passengers. The company ceased operating international routes about a year ago, focusing exclusively on domestic flights.
