The company Linhas Aéreas de Moçambique (LAM) carries a debt burden estimated at $230 million with different suppliers. The situation was aggravated in 2020 due to the covid-19 pandemic that put the national flag company nearly inoperable.
According to LAM's General Manager, João Carlos Pó Jorge, the airline is currently reducing its operational costs, of which only 12% are salary-related.
Still, the balance sheet through December 2019 points to a 2.1 billion Metical reduction in the company's total assets, from 6.6 billion Meticals versus the previous 8.7 billion Meticals in 2018.
Contrary to the reduction in assets, liabilities increased from 16.5 billion Meticais in 2018 to 18.4 billion Meticais in 2019, a change of 1.9 billion Meticais. LAM's net debt evolved from 15.4 billion Meticais in 2018 to 17.4 billion Meticais in 2019, corresponding to 230 million dollars.
"The important thing is that the operational loss has reduced in the last two years. In 2021, if the pandemic eases and the company starts to operate regularly, making good use of the available resources, the financial balance may be positive," considers Pó Jorge.
With a debt (internal and external) estimated at $230 million, LAM has been reducing operating losses since 2018. As part of its strategy for sustainability, LAM has invested in standardizing its fleet of aircraft.
Allied to this, the Government, through IGEPE, will advise the company to make it sustainable, i.e., with a debt service that does not suffocate the payment of other financial obligations, much less jeopardize investments, aiming to improve the quality of the services provided.
Meanwhile, João Carlos Pó Jorge guarantees that "LAM will continue" and is making efforts to increase its revenues, although it does not intend to be in all segments of air transport.
To this end, it has started Mex (with teaser flights), but for Lichinga, the business is not feasible to fly a Boeing 737.
Recognizing the long road to self-sufficiency in operational terms, LAM has been focusing on reducing the company's operational costs, of which between 12 and 14% are related to salaries, with the majority corresponding to aircraft lease payments and other financial obligations arising from its airline activities.
Along with the reduction in operating costs is the decrease in its workforce, which in 2018, when it started the reforms, had 933 employees and currently has 785.