LATAM expands codeshare with Airlink and expands its range of destinations in Africa
Analysis: LAM cancels plane purchase due to $139 mn debt – Hanlon
8:35 CAT | 14 Sep 2016
File photo / LAM chair Antonio Pinto de Abreu
Mozambique Airlines (LAM) has cancelled its order for three Boeing 737 Next Generation aircraft, “because it is unable to pay for these acquisitions”, LAM chair Antonio Pinto de Abreu told reporters at the IGEPE meeting Monday. The state-owned airline dismissed its entire board on 10 February and named a new board chaired by de Abreu, who had been deputy government of the Bank of Mozambique. The former LAM management has always painted a picture of a financially healthy company, but the reality was different. Pinto de Abreu said that six months ago LAM had debts of $160 million, which has now been brought down to $139 mn. Back in 2014, the company’s then Chief Executive Officer, Marlene Manave, said LAM was acquiring the three Boeings which would be delivered in 2015, 2016 and 2017. Then delivery of the first was delayed until November this year, and now all three are cancelled. Pinto de Abreu said LAM had already paid Boeing some money which he is trying to recover. (AIM 9 Feb, 5 Sep; ch-aviation 7 Sep; http://www.ch-aviation.com/
de Abreu said the deficit is “structural”. One problem is that LAM has six kinds of aircraft (mostly Boeing, Embraer and Bombardier) which is unusual for a small airline with only 13 planes and means LAM must manage six sets of spare parts and train pilots and technical staff to handle them, which raises costs. A new study of LAM by the new Maputo think-tank Waza accepts there are structural factors, for example that half of all passengers fly to or from Maputo. And only half of airports have refuelling facilities, requiring planes to carry extra fuel. Nevertheless, poor management means these structural problems have never been responded to. “LAM operates as if it did not need to be commercially viable,” the report notes.
According to Waza, LAM fares are more expensive per kilometre than other regional airlines. In addition, LAM is “extremely unreliable” with delays and short notice cancellations and alterations that are never communicated to passengers. “Actually, LAM does not have any real customers’ service, the their ground staff is not trained in customer service.” Furthermore, “data collection as well as performance review is not common at LAM”. “Other costs are passed on to LAM’s customers, including expensive catering (despite the mediocre meals) and the exceptionally high scannng fees charged by private company Kudumba.” Kuduma is part owned by SPI, and Frelimo party holding company, and was given the contract for port and airport scanning in preference to more competitive bids. Since then there have been repeated complaints about Kudumba’s high charges. (CIP Newsletter 2 and 16, 2007 and 2012).
Waza calls itself a “think-and-do tank” aimed at developing solutions, as is on http://wazatank.com/ (The report “Mozambique Aviation: let it air!” is by Waza director Claire Hassoun and is on http://wazatank.com/wp-
By: Joseph Hanlon
Source: News reports & clippings
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