Fly Modern Ark (FMA), which exited the restructuring of Mozambique’s national airline, LAM, has stated on October 27, that the state airline urgently needs €9.2 million to continue operations and expressed willingness to rejoin the process if needed.
According to FMA, which withdrew from the LAM restructuring on September 12 after 15 months, the airline’s fleet has dwindled from ten aircraft to just three under FMA’s management, creating an “urgent need for support.” The company stated that “without a government bailout of at least $10 million [€9.2 million], LAM’s future remains uncertain.”
The agreement between LAM and FMA, the South African firm leading the airline’s restructuring, concluded on September 12, as confirmed by FMA’s representative, Theunis Crous. Crous, who served as interim director of LAM from February to July this year, explained, “We had a contract with LAM, and it ended. We accomplished what we were contracted to do.”
The restructuring effort, initiated in April 2023, aimed to revitalize LAM, which has struggled with operational issues linked to a reduced fleet and insufficient investment, including some non-fatal incidents attributed to inadequate aircraft maintenance. However, FMA expressed concern over LAM’s recent suspension from the International Air Transport Association (IATA) clearing system, citing unfulfilled financial obligations. “FMA made IATA management a priority, as it represented a significant financial drain for LAM,” Crous stated, noting that FMA had suspended all IATA-related payments to curb costs. Yet, since FMA’s departure, supplier invoices handled by IATA have reportedly surged to $3 million [€2.8 million].
Additionally, FMA noted that unpaid suppliers and service providers have led to rising ticket prices, contrasting sharply with the 30% price reduction FMA had achieved during its leadership.