Mozambique’s LAM to review OEM, lessor contracts – report

LAM – Linhas Aéreas de Moçambique’s new interim chief executive, Theunis Crous, plans to review the airline’s existing partnerships with OEMs and lessors as part of a new strategic plan for the state-owned carrier until 2030.

Crous told the Lusa news agency he would continue to review the loss-making airline’s assets and oversee its financial restructuring while implementing the Mozambican government’s vision for the company’s growth.

“We are going to review the strategic partnerships with Boeing, Bombardier Aerospace, Embraer, and De Havilland Aircraft of Canada,” he said, adding the same would be done with aircraft leasing companies. “We’re going to work on creating the 2025-2030 strategic plan, renewing and standardising the fleet, and consolidating the new [international] routes Maputo-Lisbon and Maputo-Cape Town International,” he said, adding that expanding domestic, regional, and intercontinental routes is also a key objective.

Crous was not immediately available for comment when contacted by ch-aviation. He replaced former general manager João Po Jorge, who was ousted by the LAM board on February 28 after Mozambique’s anti-corruption office launched separate investigations into allegations of EUR3 million euros (USD3.2 million) worth of embezzlement in ticket sales through Automatic Payment Terminals that do not belong to LAM, and the management of the airline’s fleet.

Crous concurrently leads the South African brokerage Fly Modern Ark, which heads a government-appointed commission overseeing the restructuring of LAM. FMA’s annual contract comes up for renewal on April 30, 2024, coinciding with Crous’s interim term to lead LAM.

Since its appointment in April 2023, FMA’s close oversight and involvement in operational decisions, reporting directly to Minister of Transport and Communications Mateus Magala, has created problems for the airline’s previous management. Additionally, it has publicly criticised the management on several occasions. This followed scrutiny from opposition politicians regarding FMA’s expertise in scheduled airline operations, prompted by a report from the country’s corruption watchdog.

When asked by Lusa if his appointment was a sign of confidence in his efforts to revitalise LAM, Crous deferred to the government but expressed gratitude for the opportunity. Magala, meanwhile, told reporters that FMA would continue in its role unless reasons were presented for reconsideration.

Crous previously touted an ambitious plan to expand the fleet to 22 aircraft by 2027. The plan depends on enough capital, revenues, and financing from lenders. LAM expects government financing and debt pardoning. Additionally, the airline is actively pursuing funds to enhance cash flow and has favourable leasing agreements. FMA’s involvement has reportedly led to improved payment discipline with suppliers and better contract oversight.

ch-aviation fleets data shows LAM currently operates one B737-700, leased from Aergo Capital; three leased DHC-8-Q400s; three EMB-145MPs used by subsidiary MEX – Mocambique Expresso (MXE, Maputo); and two CRJ900s wet-leased from CemAir (5Z, Johannesburg O.R. Tambo).

The airline serves 12 domestic destinations. Regionally, it flies to Johannesburg O.R. Tambo and Cape Town (South Africa), Dar es Salaam (Tanzania), Harare International (Zimbabwe), and Lusaka (Zambia), with Lisbon being its only intercontinental destination.