Mozambique: Two new air operators or just one?

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Mozambique: Two new air operators or just one?

11:39 CAT | 08 Sep 2017

DW (File photo) / Maputo International Airport, Mozambique

There is confusion about the number of new foreign airlines that are expected to operate in the Mozambican market, but in the end it’s just one company: Malawi Airlines is operated by Ethiopian Airlines.

The Mozambican Civil Aviation Institute (IACM) has cleared two international airlines –Ethiopian Airlines and Malawi Airlines – to operate domestic routes. The companies will operate alongside five others already in the market, among them LAM, the national flag carrier, which practically has a monopoly.

“This is a change of paradigm,” the president of the Mozambique Institute of Civil Aviation (IACM) João Abreu, says. “It effectively shows that Mozambique has great potential and that the opportunities are here to be explored.”

“We think that the entrance or expression of interest is good for the user and for the development of our tourism and it is good for there to be a better choice and for the alignment with the policies of the Yamoussoukro (Cote d’Ivoire) decision,” he adds.

Mistrust

But some people view the process with mistrust. Alves Gomes is a specialist in civil aviation and starts by recalling that Malawi Airlines is operated by Ethiopian Airlines and has its southern hub in Bulantayo, Malawi. In the end, it will be only one new company entering the Mozambican market.

Luftverkehr Mosambik — LAM Airplane, Mozambique’s Largest Airline

Gomes stresses that “companies have so far only been cleared to participate; it doesn’t mean that they will start operating tomorrow. We will have to wait to see what happens”.

Gomes argues that it is necessary “to know in detail what the IACM will require, because sometimes it makes demands that are impossible for operators to meet. So far they have been financial requirements, but I don’t know what the requirements are going to be because LAM itself is competitively and financially in the dark”.

What future for LAM?

LAM (Linhas Aéreas de Moçambique) has been performing poorly in recent years and has come in for harsh criticism. Finding a cure for one of the largest and oldest cancers in the Mozambique transport sector has not proved easy.

The entry of a giant operator like Ethiopian Airlines, one of the most respected airlines in Africa, may be even more damaging to LAM. Alves Gomes believes that, “In its present condition, with one or two competitors in direct competition, LAM will go bankrupt in an instant”.

And he has doubts about any solution. “I do not know how to solve it, because, even then, there are state commitments to hundreds of workers,” he says.

The LAM situation will remain a “hot potato” in the government’s hands. Gomes recalls that “the idea was to find a partner for LAM, which is not easy given its financial situation. A partner for LAM will only be found if the State assumes all its liabilities, because no one will want to tie up with a company that has such a poor pedigree”.

Why a new tender?

The public tender for the exploration of domestic, regional and intercontinental air routes was launched by the IACM last April, but participation was weak, as the IACM itself admitted. The high number of airlines operating in the Mozambican market will have been a major disincentive.

Even so, IACM will launch a new tender, Abreu reveals.

“We are now stimulating the Mozambican air transport market. That is why we will launch a phase two competition within sixty days, to encourage other operators who might not have had the time or met the condition to compete at the time,” he says.

Source: Deutsche Welle