Government insists that LAM can be rescued

Maputo, 9 Apr (AIM) – The Mozambican government believes that Mozambique Airlines (LAM) can be restored to profitability through the involvement of other publicly-owned companies in its management, Transport Minister Joao Matlombe told the country’s parliament, the Assembly of the Republic, on Wednesday.

Answering a request from the parliamentary group of the Mozambique Democratic Movement (MDM), about the fate of LAM, Matlombe admitted that the company had recorded huge losses in recent years. LAM had lost the equivalent of 22.1 million dollars in 2021, seven million dollars in 2022, 62.2 million in 2023, and 35.7 million in 2024.

Studies ordered by the government ruled out privatisation of LAM as a solution. Instead, the government is selling shares in LAM to three reasonably healthy public companies – Hidroelectrica de Cahora Bassa (HCB), which operates the Cahora Bassa dam on the Zambezi; the rail and port company CFM; and the insurance compan EMOSE.

“The studies”, Matlombe said, “show that, with adequate investments and firm restructuring, LAM could achieve operational and financial stability within three years”.

“But for this plan to be successful, commitment from everybody is fundamental”, the Minister added. “The sustainability of LAM does not depend solely on the government, but is a collective responsibility”.

That meant that people who travelled on LAM had to pay for their tickets. “The recurrent practice of travel without paying weakens the sustainability of LAM and compomises the efforts to restructure the company”, Matlombe said.

He was thus warning that the days of free air travel for political organisations were now over.

“We cannot expect different results by maintaining the practices of the past”, warned Matlombe. “There are no miracles. The recovery of our airline depends on a collective undertaking and responsibility”.

As for the arrangement in 2023, whereby the management of LAM had been farmed out to the South African company Fly Modern Ark (FMA), Matlombe admitted that the contract with FMA did not contain penalty clauses.

“This is a shortcoming which should be a lesson to us, and strengthens our commitment to greater rigour in future interventions”, he said.

But LAM’s losses could not be blamed solely on FMA. “They are the reflex of many years of accumulated difficulties”, said Matlombe, “and so the negative results cannot be blamed solely on the management of Fly Modern Ark”.

LAM has acquired a bad reputation for cancelling or delaying flights. This must not be regarded as normal, said Matlombe, “and it is why we must accept the need for change. Structuring the company to better serve the interest of the country is not merely urgent – it is indispensable”.
(AIM)
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