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LAM Ends Partnership With Fly Modern Ark After Restructuring Process

LAM Ends Partnership With Fly Modern Ark After Restructuring Process

Fly Modern Ark (FMA), the South African company hired to lead the restructuring process of Mozambique Airlines (LAM), has ended its partnership with the company after completing the revitalisation plan that began in 2023. According to Lusa, the contract with LAM came to an end on 12 September, after FMA complied with what was asked of it under the agreement signed by both parties.

According to Theunis Christian de Klerk Crous, a partner in Fly Modern Ark who took over the management of LAM on an interim basis between February and July 2024, the company found LAM in a critical situation. At the time, the company was on the verge of bankruptcy, with more than 720 jobs at risk.

Crous emphasised that Fly Modern Ark played a decisive role in ensuring that LAM continued to operate, which made it possible to preserve jobs and ensure the continuity of flights, both domestically, regionally and intercontinentally.

The partnership between LAM and Fly Modern Ark, established in April 2023, came at a time of great difficulty for the carrier, which was facing a series of operational problems. The difficulties were associated with a limited fleet and a lack of investment, factors which contributed to a number of operational incidents, albeit without casualties.

The FMA implemented a series of measures to optimise the company’s management, improve aircraft maintenance and reinforce safety. The continuity of services, particularly to destinations such as Johannesburg, Dar es Salaam, Harare, Lusaka, Cape Town and Lisbon, was one of the positive results of the restructuring work.

Meanwhile, during its management, Fly Modern Ark identified embezzlement schemes in LAM’s operations, which resulted in losses of around 222 million meticals, were facilitated by automatic payment terminals (TPA/POS) that were not controlled by the company, but were used in ticket shops. These allegations led Mozambique’s Central Office for Combating Corruption (GCCC) to open an investigation, which is still underway, aimed at ascertaining responsibility for the fraud and assessing the management of the company’s fleet.

The end of the partnership with Fly Modern Ark coincided with a change in LAM’s leadership. In July 2024, Américo Muchanga was appointed president of the carrier, replacing Theunis Christian de Klerk Crous.

Since his appointment, Muchanga has endeavoured to consolidate the gains made during the restructuring period, having recently announced that LAM made a turnover of around 3.8 billion meticals in the first half of this year.

In addition, the company intends to expand its fleet with the acquisition of four new aircraft by the end of 2024, with the aim of improving its operational capacity and competitiveness in the regional and intercontinental markets.

Despite the formal end of the partnership, Theunis Crous emphasised that Fly Modern Ark maintains good relations with LAM’s current management and has shown itself to be available for future collaborations, if necessary.

For the carrier, the challenge now is to continue the revitalisation process started by the FMA and to tackle its persistent financial difficulties, which include an estimated debt of around 22.5 billion meticals.

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