Mozambique: Transport minister backs LAM management company

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Mozambique: Transport minister backs LAM management company

7:54 CAT | 04 Mar 2024

FILE - For illustration purposes only. [File photo: Lusa]

Mozambique’s minister of transport and communications called on Thursday for the renewal of the contract with the South African company Fly Modern Ark (FMA), in charge of the recovery of the national carrier Linhas Aéreas de Moçambique (LAM).

“What we did at the beginning was to bring in people who could help us as consultants, as advisors on the prudent decisions to be made about the management and operation of the airlines, and that’s Fly Modern Ark. Unless you give me reasons for them not to continue, they will continue,” Mateus Magala told the media on the sidelines of a public event in Maputo.

Fly Modern Ark was contracted in April 2023 to implement a restructuring and recovery plan for LAM within a year, and it is not known whether or not the agreement will be renewed.

The government official did not clarify, saying that the sector’s plan foresees LAM’s situation stabilising in between one and three years, depending on the dynamics of the process.

“That’s the period we think we can stabilise. Hopefully, it will come sooner because that’s what we want in order to take a definitive option,” added Mateus Magala.

On Wednesday, LAM’s Board of Directors announced that the company’s director-general, João Carlos Pó Jorge, would step down as part of the company’s restructuring measures.

João Carlos Pó Jorge was replaced on the same day by Theunis Christian de Klerk Crous, who will take on the role on an interim basis until 30 April, the period set for the decision to renew the contract with FMA, in which LAM’s new CEO is a partner and its managing director.

The resignation of João Carlos Pó Jorge, who had held the position since 2018, comes after LAM’s restructuring director, Sérgio Matos, denounced, at a press conference on 12 February, a scheme to embezzle money, with losses of around €3 million, in ticket shops, through automatic payment terminal machines (TPA/POS) that do not belong to the company.

According to the transport minister, the exoneration of LAM’s director-general was a “normal” procedure and was due to the need to “adjust the machine” of the company and work with people who can fulfil the parameters required of the flag carrier.

“Exoneration doesn’t always mean that everything is wrong or that the manager is worthless,” said Magala.

Mozambique’s Central Office for Combating Corruption (GCCC) has launched a process to investigate alleged corruption schemes in the sale of tickets by the Mozambican airline and in the management of the company’s fleet, a source linked to the investigations told Lusa.

The GCCC decided to act after becoming aware of new facts relating to purchasing airline tickets in LAM shops using automatic payment terminals belonging to third parties and under-invoicing in the purchase of fuel on the Maputo-Lisbon flight, the source continued.

In January 2023, the GCCC opened another case to investigate allegations about fleet management, namely the sale of aircraft, their leasing, the company’s indebtedness for purchasing new equipment and maintenance operations.

The company’s revitalisation strategy follows years of operational problems related to a reduced fleet and a lack of investment, with a record of some non-fatal incidents associated by experts with poor aircraft maintenance.

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

Source: Lusa