Mozambique: South Africa’s FMA bows out of flag carrier LAM after restructuring

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Mozambique: South Africa’s FMA bows out of flag carrier LAM after restructuring

11:22 CAT | 20 Sep 2024

File photo: Lusa

The agreement between Mozambique Airlines (LAM) and Fly Modern Ark (FMA), the South African plane leasing specialist that oversaw the restructuring of the Mozambican flag carrier, has ended, a source at FMA has told Lusa.

“We had a contract with LAM and the contract has ended,” Theunis Christian de Klerk Crous, an FMA partner who served as interim director of LAM between February and July of this year, as part of the plan to restructure the airline that began in 2023, explained to Lusa. “We did what we were contracted to do.”

The contract between FMA and LAM ended on 12 September and had been in force since April 2023, when the South African company was called in to implement a strategy to revitalise the airline after years of operational problems related to a reduced fleet and lack of investment, with a record of some non-fatal incidents associated by experts with inefficient aircraft maintenance.

Crous stressed that when FMA had come in, LAM was “almost in bankruptcy” and with some 720 people about to lose their jobs.

“We managed to keep the company flying and today we are happy because we managed to keep the company running during this period,” he emphasised, highlighting “good relations” with LAM’s new management and expressing FMA’s readiness to continue cooperating with the airline whenever necessary.

The end of the contract with FMA comes months after the arrival of a new LAM president in July, in the form of Américo Muchanga.

When the FMA took over management of the state-owned airline, it recognised that LAM had an estimated debt of around $300 million (€269 million at the current exchange rate).

During the period of FMA’s management, the South African company also denounced schemes to embezzle money at LAM, with losses of almost €3 million, in ticket shops, through automatic payment terminal machines that did not belong to the company.

Mozambique’s Central Office for Combating Corruption (GCCC) opened a case to investigate alleged corruption schemes in ticket sales at the Mozambican airline and in the management of the company’s fleet, and seized various materials.

On 26 August this year, the company’s new president announced that in the first half of the year, LAM earned a total of €52 million and that it planned to acquire four more aircraft this year.

LAM operates 12 destinations on the domestic market, regularly flies regionally to Johannesburg, Dar es Salaam, Harare, Lusaka and Cape Town. Lisbon is its only intercontinental destination.

Source: Lusa