CIP: “New LAM manager company has no experience in airline management”

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CIP: “New LAM manager company has no experience in airline management”

8:16 CAT | 12 Apr 2023

FILE - For illustration purposes only. [File photo Fly Modern Ark]- Modern Ark]

A study carried out by Mozambique’s Centre for Public Integrity (CIP) concludes that the South African company selected to take over the management of Linhas Aéreas de Moçambique (LAM) has never been involved in any experience of that sort.

The CIP study, released on Monday (10-04), indicates that the South African company Fly Modern Ark, whose selection was announced by the Minister of Transport and Communication, Mateus Magala, was rejected in 2017 by the Government of Zimbabwe, after submitting a bailout proposal in exchange for a stake in ZimAir.

“The CIP researched the company’s profile and found that it has no proven experience in managing airlines and that it has never rescued any airline, a fact that raises questions about the criteria used by the Executive for its selection,” the study remarks.

Fly Modern Ark is an aviation sector consulting company established in 2016, specializing in the leasing and sale of executive aircraft and helicopters, the rental of medium and long haul private jets and the management of executive aircraft.

Get to know the profile of Fly Modern Ark, the South African Airline hired run Mozambique Airline, Linhas Aéreas de Moçambique https://t.co/XdxbUTx6Kv

— Borges Nhamirre (@BorgesNhamirre) April 10, 2023

According to the CIP study, one of Fly Modern Ark’s business streams is the acquisition of shares in targeted bankrupt airlines in exchange for restructuring plans.

For example, in the case of Zimbabwe, Fly Modern Ark submitted a proposal to equip national airline Air Zimbabwe with turboprop craft from Chinese supplier Xian Aircraft Company in exchange for 25% of the company’s shares. The proposal was promptly rejected, according to the CIP.

Meanwhile, the CIP suggests that to ensure transparency and selection of companies with proper credentials, the Mozambican government should have opened an international public tender. “The lack of transparency in the process opens up space for questioning the criteria used to select this company, as well as the number of companies evaluated to carry out this function,” the study adds.

READ: International management for LAM

LAM has in recent years faced operational problems related to a reduced fleet and lack of investment, as well as some non-fatal incidents linked by specialists to inadequate aircraft maintenance.

Official figures indicate that the Mozambican airline has an estimated debt of US$300 million (18.9 billion meticais).

Source: Diário Econômico