Mozambique’s national airline, Linhas Aéreas de Moçambique (LAM), reported that its losses rose in 2023 to 3.9 billion meticais (60.5 million US dollars), a situation that forced the State to inject 1 billion meticais (15.5 million dollars) into the company during the year.
According to the latest Financial Statements Report, cited by Lusa, despite the accumulated losses, LAM’s service revenue grew by 4% during the period, reaching 8.8 billion meticais (124 million dollars). The company ended the year with equity of 19.6 billion meticais (304 million dollars), although current assets remained lower than current liabilities by approximately 18.6 billion meticais (288 million dollars).
Faced with these figures, the airline acknowledged that its continuity was at risk and stated that “aware of the situation, the board of directors made several appeals to shareholders, presenting multiple reports on the company’s condition and proposing a range of measures — some short-term, others strategic — to ensure sustainability.”
The report also highlighted that, in October 2024, LAM secured a commitment from its majority shareholder to provide the resources necessary to enable the airline to meet its obligations to third parties. This was done through a “comfort letter” issued by the State Holdings Management Institute (IGEPE).
LAM has faced operational problems for years, related to a limited fleet and lack of investment, with some non-fatal incidents that experts have linked to poor aircraft maintenance. In February, the government announced the sale of 91% of the state’s shares in the airline through a private negotiation. The estimated revenue from the sale — around 130 million dollars (8.3 billion meticais) — is expected to fund the purchase of eight new aircraft and the company’s restructuring.
Meanwhile, during an extraordinary general meeting of LAM shareholders, the State Holdings Management Institute (IGEPE) decided to terminate the mandates of Chairman Marcelino Gildo Alberto and board members responsible for Finance, Human Resources and Corporate Services (Altino Xavier Mavile), and Technical and Operations (Bruno Miranda).
At the same meeting, a new non-executive board of directors was appointed, made up of representatives from state-owned companies that became shareholders of the airline this year: Portos e Caminhos-de-Ferro de Moçambique (CFM), Hidroeléctrica de Cahora Bassa (HCB), and Empresa Moçambicana de Seguros (Emose).
Also approved was the creation of a “management commission, reporting to the non-executive board of directors, with executive functions, responsible for managing the company and ensuring the continuity of operations.”
In May, the government hired Knighthood Global to lead LAM’s next phase of financial and operational restructuring. The company, led by James Hogan, former CEO of Etihad Airways, was given a three-month deadline to stabilize and reposition the Mozambican airline.
“The focus in the first three months will be to stabilize and reposition LAM,” said a statement from the consultancy, noting that it would work in coordination with the new shareholders, with a mandate to acquire new aircraft and rebuild the fleet.
Source: Diário Económico
