LAM directors removed over fuel crisis – AIM report

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LAM directors removed over fuel crisis – AIM report

3:33 CAT | 06 Jul 2018

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The Mozambican government’s Institute for the Management of State Holdings (IGEPE) has removed the Board of Directors of the publicly owned Mozambique Airlines (LAM). According to a press release from IGEPE, the decision was taken during its extraordinary general meeting held on Thursday to analyse the current crisis in LAM. The meeting also took the decision to create a temporary management committee to ensure the normal operation of the airline.

For several years LAM has faced an ongoing financial crisis that, over recent months, has led its suppliers to demand prepayments for jet fuel. This crisis reached a new low on Wednesday when LAM cancelled almost all flights between Maputo, Beira, and Nampula, leaving over three hundred passengers grounded.

In a statement, LAM admitted that it also needed to cancel flights on Thursday due to its inability to guarantee the supply of Jet A1 fuel. However, by Friday morning normal service was service resumed.

At a press conference in Maputo on Thursday, Minister of Transport Carlos Mesquita acknowledged the existence of management problems inside LAM and explained that this had resulted in the company failing to settle its account with its fuel suppliers.

The minister elaborated that the government is currently working on restructuring LAM and other publicly owned companies such as the telecommunications providers TDM and MCel.

In March, LAM had to delay and cancel flights after a similar interruption, resulting in it agreeing to provide pre-payment for its suppliers.

Source: AIM