Mozambique: LAM says will appeal fines imposed by competition regulator – Watch

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Mozambique: LAM says will appeal fines imposed by competition regulator – Watch

1:30 CAT | 13 Aug 2025

Screen grab: STV

The chairman of Mozambique Airlines’ (LAM) Management Committee, Dane Kondic, says that the flag carrier will appeal the sanctions imposed by the Competition Regulatory Authority (ARC), alleging that the latter failed to take into account the facts presented in the defence.

“We disagree with the decision, but there is an appropriate forum to appeal,” Kondic said on Tuesday (12-08) at a press conference regarding the fines of approximately 11 million meticais imposed by the ARC.

Without directly addressing the arguments he believes were ignored by the regulator, Kondic, a dual Serbian-Australian national, emphasized that the company is in a unique position compared to other carriers in the region because it has only four leased aircraft and is virtually excluded from international routes.

“South Africa has airlines with routes to eight Mozambican cities, but LAM only operates to one single destination in that country,” Kondic notes.

Kondic argued that the national carrier’s pricing policy is common in commercial aviation, suggesting that the ARC should not penalize LAM for this model.

While disagreeing with the fines imposed by the ARC, Kondic emphasized that the facts supporting the penalties occurred under previous LAM administrations.

“None of us on this [current] management committee are responsible for what happened. We are not here to avoid legal liability, but we will appeal,” he emphasized.

Dan Kondic stated that the members of the board who were in office when the circumstances that led to the fines imposed by the ARC occurred are the ones who must provide the answers regarding the case.

Kondic, in office now for about three months, stated that LAM’s new management aims to be guided by transparency and honesty, and to rescue the carrier from the difficult situation it finds itself in.

“We are doing what we can to restructure and rebuild the company, because a strong and healthy LAM makes an enormous contribution to the development of the country’s economy,” he added.

The ARC fined LAM 8,332,303.54 meticais, equivalent to 0.180% of its 2024 revenue, for anticompetitive practices involving abuse of a dominant position, and 2,777,434.51 meticais for lack of cooperation and provision of incomplete information, according to a decision seen by ‘Carta’.

The ARC also decided to forward the investigation to the Attorney General’s Office (PGR) following the illicit acts committed by the flag carrier, the text reads.

ARC gave the flag carrier 15 days to pay the fines, counting from the date of receipt of the aforementioned decision, and also imposed a mandatory financial penalty.

“Forward this case to the Attorney General’s Office for the application of other applicable legal measures within the scope of its powers, in compliance with the provisions of Article 46.3 of the Competition Law,” the text reads.

ARC states that it decided to open the investigation after the Civil Aviation Institute of Mozambique (IACM) reported on September 24, 2022, that LAM had applied a fuel surcharge with the code YQ on airline ticket sales. This surcharge resulted from the name change of the YR surcharge, applied due to the anomalous variation in fuel prices (YR), whose suspension had been ordered by the then Minister of Transport and Communications in an order dated July 23, 2021.

The regulator’s president was previously a managing director at LAM

Interestingly, the president of ARC, Iacumba Aiuba, was previously a managing director of LAM, which is now under the regulator’s watch.

Aiuba was appointed in July 2014 to the position of managing director of the national carrier, being dismissed two years later, in 2016. In July 2021 he was appointed chairman of the ARC, replacing Júlio João Pio.

Source: Carta de Moçambique