South Africa: Fly Modern Ark sues LAM Mozambique Airlines over unpaid fees – report

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South Africa: Fly Modern Ark sues LAM Mozambique Airlines over unpaid fees – report

7:33 CAT | 13 May 2025

FILE / For illustration purposes only. Theunis Crous served as the Chief Executive Officer of Fly Modern Ark (FMA) and was also appointed as the interim Director-General of Mozambique Airlines (LAM) in March 2024, stepping out when Américo Muchanga was appointed LAM chairperson on July 19 2924. [File photo: Domingo]

Fly Modern Ark (FMA), a South African aviation consultancy, has initiated legal proceedings against Mozambique’s national carrier, LAM, over unpaid fees for a restructuring contract. This legal battle adds another layer of complexity to LAM’s ongoing struggles with operational efficiency and financial stability, impacting travel agents across Southern Africa.

The lawsuit stems from a restructuring project FMA undertook for LAM between 2023 and 2024. Despite FMA’s claims of successful cost reduction and operational improvements during their management, the core financial issues plaguing the airline remain unresolved. This legal action raises concerns about LAM’s financial health and its ability to meet its obligations, impacting travel partners who rely on the airline’s services.

Adding to the complexity, the Mozambican government has launched a forensic audit into LAM’s operations over the past decade. This audit aims to uncover the root causes of the airline’s persistent financial difficulties and alleged mismanagement. While FMA has expressed willingness to cooperate with the investigation, the legal dispute adds a challenging dimension to the process. For travel professionals, this audit raises questions about transparency and accountability within the airline.

READ: Mozambique: Fly Modern ark open to cooperate in LAM forensic audit – AIM report

Mozambique: Government wants forensic audit of last 10 years of LAM accounts

LAM’s operational capacity has been severely hampered by a drastically reduced fleet. Currently operating with only three aircraft, the airline has struggled to maintain regular flight schedules and meet passenger demand. This reduced capacity has significant implications for regional air connectivity, impacting travel itineraries and potentially disrupting travel plans across Southern Africa. Travel agents working in the region face the challenge of finding alternative routes and carriers for their clients, adding complexity to their operations.

The financial challenges facing LAM are substantial. The airline has reported significant losses in recent years, accumulating a substantial debt burden. This financial instability raises concerns about the airline’s long-term viability and its ability to invest in essential upgrades and fleet expansion. For travel agents, this financial precariousness translates into uncertainty regarding service reliability and the potential for future disruptions.

The combination of the legal dispute, the government audit, and LAM’s operational and financial woes creates a complex and challenging landscape for the Southern African travel industry. Travel professionals relying on LAM for regional connections face uncertainty and the need for contingency planning. The outcome of the legal proceedings and the government audit will be crucial in determining the future trajectory of the airline and its impact on regional travel.

FMA’s involvement in LAM’s restructuring efforts, despite the current legal dispute, highlights the complexities of navigating the African aviation market. The case underscores the challenges faced by airlines in the region, including financial instability, operational inefficiencies, and the need for sustainable growth strategies. For travel agents, this situation serves as a reminder of the importance of staying informed about industry developments and adapting to changing market conditions.

ALSO READ: Mozambique: South African takes control as LAM general-director – AIM report

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The ongoing developments at LAM have broader implications for the African aviation sector. The airline’s struggles highlight the need for greater investment in infrastructure, improved management practices, and stronger regulatory frameworks to ensure the long-term viability of African carriers. For travel professionals, these challenges underscore the importance of diversifying their product offerings and partnering with reliable airlines to mitigate risks and provide seamless travel experiences for their clients.

Source: Travel News Africa