Mozambique’s national airline (LAM), which is to be restructured as part of the country’s economic reform programme, is facing a crisis. Not only is it bedevilled by a drop in demand and maladministration but it is also facing stiff competition from neighbouring South Africa.
Since its formation in 1980, following the demise of the Portuguese airline Deta, no financial planning of LAM has been carried out. This, according to sources, enabled the state to drain out capital as profits.
The crisis reached a head in 1992 when domestic flights ceased to be the main mode of transport following the end of the civil war and the opening up of roads and other means of transport.
The number of passengers dropped to 134 000 a year from 200 000 and turnover fell by 33%. By 1995, LAM had an accumulated deficit of $6-million as well as a debt of about $15-million. The situation worsened when a lease agreement expired for three aeroplanes hired from Ireland.
The loss of the aircraft has stopped the airline from keeping up its commercial operations. LAM has been facing constant breakdowns of equipment due to old age, causing cancellations of flights, and claims that the airline may not be safe.
But Perreira Manuel Rodrigues, who has been with the airline and its predecessor for 38 years, says LAM is one of the safest in the region.
“On no occasion have the standards of the manufacturer of the equipment not been observed rigorously,” he says. “I feel safer in an LAM aeroplane than in one of any other airline.”
For Rodrigues, allegations that LAM is not safe are no more than attempts by competitors to give the airline a bad name.
The liberation of South Africa has also contributed to the problems as airlines from Europe, Asia and America have re-established direct links with Johannesburg. LAM was forced to close its offices in Rome, Berlin, Copenhagen, Paris and Harare. It also reduced its labour force from a peak of 2 000 in the 1980s to 1 335 at the moment. By 1997, there will be about 900 staff.
Despite the gloomy picture, managing director Jose Viegas believes the present economic reform programme will see the airline flying high again, particularly if management is improved. He says the problem of the reduced fleet — now down to two Boeings and 14 light aeroplanes — will be solved by chartering.
But there is still debate on the status of LAM under the reform programme.
Although the state has not yet decided what to do, the World Bank and the International Monetary Fund have insisted on its privatisation.
The technical unit of the Restructuring of Enterprises, a government agency, also favours privatisation but is facing opposition from senior government officials who want LAM to continue as a national airline. — AIA