Mozambique: Government Trusts New Management of Flag Carrier LAM

Mozambique: Government Trusts New Management of Flag Carrier LAM

State Airline Under New Management

Earlier this year, Mozambique Airlines (LAM), the national airline of Mozambique, was placed under the management of Fly Modern Ark (FMA), a South African company. The move came as part of a broader strategy to revitalize the struggling airline, which has been plagued by operational issues and a substantial estimated debt of around $300 million (€277.7 million).

Since taking over the management, FMA has been working tirelessly to recover debt owed to LAM, streamline its operations, and set it on a path of profitability. However, the process has not been without its challenges, with accusations of corruption and debt mismanagement being levelled against the state-owned airline.

Addressing Accusations of Mismanagement

In response to these allegations, Mozambique’s Minister of Transport and Communications, Mateus Magala, reiterated his confidence in FMA’s management and dismissed the accusations as part of the challenges of change management. He emphasized that the reform process for the airline is ongoing and will take time, underscoring the importance of patience and perseverance in the face of challenges.

FMA’s Debt Recovery Efforts

One of the significant challenges FMA faced upon assuming management was the recovery of debt owed to LAM. As of June, it was disclosed that customers owed the airline 1.2 billion meticais (€17.6 million). The debtors included a wide range of entities, including public and private companies, ministries, the armed forces, public institutions, and the ruling political party, the Front for the Liberation of Mozambique (Frelimo).

FMA has since initiated collections, debt payment plans, and account reconciliations to recover these debts. As a result of these efforts, Frelimo, which initially owed 22 million meticais (€323,000) to the airline, has so far repaid five million meticais (€73,400) and has been removed from the list of entities allowed to fly on credit.

Revitalizing the Airline

Despite the challenges, FMA’s efforts to revitalize LAM are underway. The company is keen on addressing the airline’s operational issues, which have resulted from a reduced fleet and lack of investment. Over the years, these issues have led to numerous non-fatal incidents linked to inefficient aircraft maintenance.

The process of revitalizing LAM is a significant task that requires a comprehensive and systematic approach. Not only does it involve recovering debts and improving operational efficiency, but it also entails instilling a new culture of accountability, transparency, and customer service.

Under FMA’s management, there is hope that LAM can overcome its challenges, return to profitability, and regain its reputation as a reliable and efficient national airline. The journey may be long and fraught with obstacles, but with determination, diligence, and effective management, a revitalized LAM is a viable prospect.