Africa-Press – Mozambique. The debt of the state-owned airline Linhas Aéreas de Moçambique (LAM) fell 2.4% during the second quarter of this year, to almost 5.889 million meticais (78.5 million euros), according to data from the Ministry of Finance compiled by Lusa on Thursday.
According to data from a report on the evolution of Mozambican public debt, in the case of LAM, this represents a nominal reduction of 144.6 million meticais (two million euros) in the second half, compared to the first quarter of 2025, when the total amount—internal debt—exceeded 6,033 million meticais (80.5 million euros).
LAM will be able to pay its accumulated debt in annual instalments, which will also be guaranteed by the State with commercial banks, according to the resolution authorizing the operation, approved on September 2nd by the Council of Ministers.
In a statement, the Government stated that it had approved “the resolution authorizing the payment of the annual instalments of LAM’s debt, guaranteed by the State with commercial banks,” although without providing figures.
In the same resolution, the Government authorized the Institute for the Management of State Holdings (IGEPE), the entity that manages and coordinates the State’s business sector, to establish a special purpose vehicle (SPV) for the management and settlement of this debt.
A resolution was also approved authorizing the formation of a special purpose vehicle (SPV) company owned by the companies Hidroelétrica de Cahora Bassa (HCB), Portos e Caminhos de Ferro de Moçambique (CFM), Empresa Moçambicana de Seguros (EMOSE), and LAM shareholders, “whose main objective is to secure financing for the acquisition of a stake” in the airline.
LAM virtually stopped operating international flights this year, focusing on domestic flights, also leading to new management in May and the entry of HCB, CFM, and EMOSE as shareholders.
To minimize recurring problems with flight cancellations, the company intends to acquire five Boeing 737-700 aircraft and, pending this process, has launched a tender to lease another five.
LAM’s losses soared to 3.977 billion meticais (53.5 million euros) in 2023, forcing the State to inject one billion meticais (13.7 million euros) and issue a comfort letter in 2024, as reported by Lusa on August 7.
LAM, which has not publicly disclosed its accounts, had recorded losses of 448.6 million meticais (six million euros) in 2022, which soared the following year, according to the most recent available financial statements.
The airline has been facing operational problems for several years related to a small fleet and lack of investment, with a number of non-fatal incidents reported, which experts attribute to poor aircraft maintenance. It is currently undergoing a major restructuring process.
Despite the accumulated losses that year, LAM’s service sales grew 4% in 2023, compared to 2022, to 8,813 million meticais (118.7 million euros), according to the report, which referred to the majority shareholder’s “commitment” “to provide the necessary resources” to allow the company “to comply with its obligations and commitments” to third parties, “through a comfort letter dated October 7, 2024”, issued by IGEPE.
It added that, “given the loss recorded” in the fiscal year “of 2023 and in previous years” and because the company closed its accounts for that year with negative equity of 19.67 billion meticais (265 million euros), compared to 16.765 billion meticais (225.8 million euros) in 2022, and that current assets “were less than current liabilities” by approximately 18.641 billion meticais (251 million euros), the carrier’s continued existence was in question.
“Aware of this situation, the board of directors appealed, through several presentations made to shareholders about the company’s situation, and proposed measures, some short-term and others strategic, in order to maintain the company’s sustainability,” the report reads, adding that in 2023 the State “made accumulated supplementary payments amounting to 1,017,393,669 meticais [13.7 million euros].”
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