LAM eyes election period opportunities

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LAM eyes election period opportunities

12:48 CAT | 28 Aug 2018

File photo: Macauhub

More than a month has gone by since João Carlos Pó Jorge took up the reigns at LAM (Mozambique Airlines). For now, among others he has up his sleeve, his plan is to take advantage of the coming election period to maximise the income of the debt-laden company.

In an interview with the newspaper O País, João Carlos Jorge says that the company is investing to cope with the increased movement occasioned by the municipal elections this year. However, due to financial constraints, the company cannot think about buying new aircraft at the moment. Instead, “we are going to get additional equipment, in principle only temporarily, and only then will we look at the possibility of getting [it] longer term”.

He hopes these investments will solve one of the company’s biggest problems: operational costs being higher than incomes, a situation LAM’s director says he is working hard to reverse.

“We’ve already begun to cut back some of the expenses we had. Although I can go into detail right now, I can clarify that these are essentially infrastructure maintenance costs. We are already relinquishing some responsibilities that we had but do not want to continue to have,” Jorge explained, adding that “the numerical results will only be noticeable after three months under the new structure”.

One solution that companies sometimes use in a situation in which they face financial difficulties is laying off workers, but this is not the plan at Mozambique Airlines, at least not for now.

“Obviously this is a critical moment for the company, but we want, at all costs, to maintain our workforce, which is valuable, but large,” Jorge argues. “We want to preserve the investment we have made in our workforce.”

Another of Jorge’s concerns, since the early days of his leadership, is that the flagship carrier is being choked by debts to suppliers and commercial banks.

At the moment, he says the airline is in a very advanced stage of talks with banks that the company owes money to, but “details cannot be given yet because the company has not yet decided to disclose this information”.

He also says that one of LAM’s great advantages is the fact that the government is by its side, although it “cannot give financial support, in view of the current situation”.

The government gave the new management of Mozambique Airlines 18 months to complete the process of restructuring the company.

Source: O País