{"id":38511,"date":"2023-05-10T16:46:12","date_gmt":"2023-05-10T16:46:12","guid":{"rendered":"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel"},"modified":"2023-05-10T17:58:19","modified_gmt":"2023-05-10T17:58:19","slug":"intervention-necessary-to-rescue-lam-and-tmcel","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel","title":{"rendered":"Intervention necessary to rescue LAM and Tmcel"},"content":{"rendered":"

Africa-Press – Mozambique. <\/strong><\/span>The Mozambican government has been obliged to intervene to save Mozambique Airlines (LAM), and the publicly owned telecommunications company, Tmcel, otherwise these companies faced the prospect of collapse, Transport Minister Mateus Magala, told the country\u2019s parliament, the Assembly of the Republic, on Wednesday.<\/p>\n

Speaking in a question and answer session between the government and the parliamentary deputies, Magala said LAM \u201chas been facing considerable challenges over the past ten year. This heavy legacy of challenges has been growing and worsening\u201d.<\/p>\n

All analyses by Mozambican and foreign experts agreed that \u201cLAM cannot survive in its current state\u201d.<\/p>\n

Its business \u201cis 90 per cent financed through debts, a figure which is twice the global average\u201d, said Magala. Last year, LAM informed the government of losses of 74.6 million US dollars. The company was also holding onto nine million dollars of deferred taxes.<\/p>\n

\u201cThe situation is so serious that LAM has had difficulties in paying pensions since 2019\u201d, added the Minister. The company had been quite unable to implement the government\u2019s policy of attracting more passengers through low fares. On the contrary, LAM\u2019s fares \u201care very high and hence elitist\u201d.<\/p>\n

The government had called on international consultants to identify solutions, and this assessment concluded that \u201cwithout adequate intervention, LAM could be on the brink of collapse\u201d.<\/p>\n

The immediate challenge, said Magala, was to stabilize the company to avoid further losses. This would \u201cprovide more time so that we could review all the questions raised in the assessment, and determine with more certainty the future of LAM\u201d.<\/p>\n

A \u201cCouncil of Transformation of LAM\u201d was set up, led by Magala and the Minister of Economy and Finance, Max Tonela, to take \u201cstrategic decisions during a transitional period of between 12 and 18 months\u201d.<\/p>\n

This led to the decision to hire a South African company, Fly Modern Ark (FMA) to manage the transition of LAM. Magala described FMA as \u201can experienced aviation company with a diversified range of aviation knowledge\u201d.<\/p>\n

FMA has agreed to bear the risks of the operation. The FMA managers will be paid, not out of the Mozambican state budget, but out of \u201cmoney from improved efficiency and increased revenue from the operations of LAM\u201d.<\/p>\n

The agreement with FMA involves \u201ccreating a mixed team led by FMA, and including some LAM cadres to transfer knowledge and increase capacity\u201d. Thus, said Magala, FMA \u201chas on its team Mozambican managers who are heading some areas such as risk analysis and project management\u201d.<\/p>\n

Later this month, he added, FMA will present the first report that identifies the rapid gains attained in the first month of operation\u201d.<\/p>\n

The government\u2019s expectation is that this intervention \u201cwill normalize the main economic and financial ratios\u201d, and ensue that \u201ctechnical and operational questions reach the highest standards of the industry\u201d.<\/p>\n

\u201cThe LAM brand has great value and history on the national and international market, and so we will do everything to preserve this legacy and confer due pride on all Mozambicans\u201d, declared Magala.<\/p>\n

The Minister thought that the financial situation of Tmcel was \u201cmuch more complex\u201d than that of LAM. On occasion, it had been unable to pay wages to its 1,700 workers. Its total debt has reached 400 million dollars and is rising.<\/p>\n

Tmcel was losing market share, said Magala, and its revenue was declining. Its technological platforms were outdated, leading to \u201cvery high operational and maintenance costs. Almost all the hardware and software are at the end of their useful life, and have no support from the supplier\u201d.<\/p>\n

Just as with LAM, a detailed assessment of Tmcel led to the conclusion that, without urgent intervention, the company is on the road to collapse and bankruptcy.<\/p>\n

The favoured intervention, said Magala, would be to find a multinational telecommunications operator that was prepared to become a strategic partner of Tmcel.<\/p>\n

But that would involve selling off 80 per cent of Tmcel shares, while the government agreed to bear all the company\u2019s debts, and to reduce its work force by 60 per cent.<\/p>\n

A consultative group is being set up to look into the recommendations from various reports on Mcel, including one from the World Bank. But in the meantime, a \u201cCouncil of Transformation of Mcel\u201d has been set up. This Council will \u201csystematize concrete measures for the stabilization of Tmcel to be announced and implemented as from this month\u201d.<\/p>\n

Magala described Tmcel as \u201ca strategic company with a potential to generate resources for its sustainability and to finance the economy\u201d.<\/p>\n

\u201cChanges require sacrifices from everyone\u201d, he said. \u201cWe must impose a new discipline on the commercial management of the companies being restructured, so that they really do achieve good results\u201d.<\/p>\n

For More News And Analysis About Mozambique<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mozambique. The Mozambican government has been obliged to intervene to save Mozambique Airlines (LAM), and the publicly owned telecommunications company, Tmcel, otherwise these companies faced the prospect of collapse, Transport Minister Mateus Magala, told the country\u2019s parliament, the Assembly of the Republic, on Wednesday. Speaking in a question and answer session between the […]<\/p>\n","protected":false},"author":84,"featured_media":38510,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,12],"tags":[233,281,283],"class_list":["post-38511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-africa-press","tag-africa-press-mozambique","tag-mozambique"],"yoast_head":"\nIntervention necessary to rescue LAM and Tmcel - Mozambique<\/title>\n<meta name=\"description\" content=\"The Mozambican government has been obliged to intervene to save Mozambique Airlines (LAM), and the publicly owned teleco ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Intervention necessary to rescue LAM and Tmcel\" \/>\n<meta property=\"og:description\" content=\"The Mozambican government has been obliged to intervene to save Mozambique Airlines (LAM), and the publicly owned teleco ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\" \/>\n<meta property=\"og:site_name\" content=\"Mozambique\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-10T16:46:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-10T17:58:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2023\/05\/postQueueImg_1683720986.85.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"987\" \/>\n\t<meta property=\"og:image:height\" content=\"674\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Intervention necessary to rescue LAM and Tmcel\",\"datePublished\":\"2023-05-10T16:46:12+00:00\",\"dateModified\":\"2023-05-10T17:58:19+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\"},\"wordCount\":784,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2023\/05\/postQueueImg_1683720986.85.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Mozambique\",\"Mozambique\"],\"articleSection\":[\"all news\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\",\"url\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/intervention-necessary-to-rescue-lam-and-tmcel\",\"name\":\"Intervention necessary to rescue LAM and Tmcel - 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