Africa-Press – Mozambique. Due to its high debt, Mozambique’s government plans to achieve operational stability for Mozambique Airlines (LAM) in three years after selling state shares in the company to public companies.
The figures presented by the minister of transport and logistics, João Matlombe, in parliament, where the government is briefing MPs today and Thursday, show that in 2021, the flag carrier recorded a loss of just over 1.4 billion meticais (€20 million), in 2022 with 448.6 million meticais (€6.3 million), 2023 with 3.9 billion meticais (€56 million) and 2024 with a record of 2.2 billion meticais (€31 million).
At issue is the government’s authorisation, on February 5, for the sale of 91% of the state’s stake in the carrier Linhas Aéreas de Moçambique (LAM) to state-owned companies, indicating that the amount will be used to purchase eight aircraft.
The resolution approved by the Mozambican government stipulates that only three state-owned companies – the Cahora Bassa Hydroelectric Plant (HCB), Caminhos de Ferro de Moçambique (CFM) and Empresa Moçambicana de Seguros (Emose) – can acquire the state’s stake in LAM.
In Mozambique’s parliament, João Matlombe said that the government had opted to keep LAM under public control, involving strong companies from the state business sector, after evaluating privatisation and partnering with a strategic private 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,” added João Matlombe.
In the same speech, Mozambique’s government rejected the idea that LAM’s current losses are a consequence of the management of the South African company Fly Modern Ark (FMA), which took over the management of LAM in April 2023 for a restructuring process that ended in September last year.
“The losses recorded by LAM 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 South African company’s management, flights were reintroduced, and the Beira/Johannesburg/Beira link was established, including the acquisition of a cargo plane. The minister said these actions “negatively impacted the company’s operational performance”.
“Delaying and cancelling flights, as has been happening, cannot be part of the normality of a country that aspires to development (…). Frequent delays and cancellations should not and cannot be seen as normal in a country as vast and promising as ours. And that’s exactly why we must be upfront about the need for change,” concluded Mr Matlombe.
For several years, 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.
When the FMA took over management of the state-owned airline, it recognised that LAM had an estimated debt of around $300 million (€269 million at the current exchange rate).
During FMA’s management, the South African company also denounced schemes to embezzle money at LAM, with losses of almost €3 million, in ticket shops through automatic payment terminal machines (TPA/POS) that did not belong to the company.
Mozambique’s Central Office for Combating Corruption (GCCC) opened a case to investigate alleged corruption schemes in ticket sales at the Mozambican airline and in managing the company’s fleet, and seized various materials.
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