LAM standardizes fleet to minimize operational costs

LAM uniformiza frota para minimizar os custos operacionais

The Mozambique Airline Company (LAM) is standardizing its fleet of aircraft, which should include the sale of Embraer brand airplanes purchased in Brazil.

The measure was put forward recently by the administrator of the Institute for the Management of State Holdings (IGEPE), Raimundo Matule, and, according to him, aims to improve performance and minimize the flag carrier's operating costs.

Acknowledging that the company faces structural problems that ultimately affect management, Matule justified that it makes no sense for a company as small as LAM to be flying with planes of three to four different brands.

About the Embraer, whose acquisition took place almost ten years ago, the IGEPE administrator declined to discuss the merits of their purchase at the time it took place, leaving, however, one guarantee: "These planes are technologically outdated.

He added that Embraer itself launched after the models supplied to LAM two more models. "So LAM can't think about the future with the Embraer and, as far as I know, is already trying to sell them," he said.

At the time, Matule justified that a multi-brand operation, as LAM does, entails extremely high costs, both in terms of maintenance and parts procurement.

He explained that the strategy is to leave the company operating, at most, with two types of aircraft, but never more than that.

"If it were possible to operate with only one brand, we would move towards this strategy, but it is clear that due to the conditions of the country itself we cannot operate one brand," he said. To defend this thesis, the senior manager of IGEPE gave the example of Vilankulo, where the runway is very short, which does not allow the landing of a Boeing 737.

"So, the first brand that will stay is Boeing, for the longer runways, and for the shorter ones, you will operate with the Q-400. This means that LAM will gradually operate with these two brands," he explained.

IGEPE's administrator did not refer to numbers, but made it clear that this reduction of brands brings great cost rationalization, from the acquisition of parts to the specialization of workers, who will now concentrate on just two brands.

He also said that the Q-400, for medium distances, is more efficient in terms of fuel expenses and operating costs.

Remember that in order to keep the flag carrier flying, IGEPE injected last year about 700 million meticais. Because of the crisis caused by the Covid-19 pandemic, the company's revenues have plummeted, a scenario that still has no end in sight, at least as long as the pandemic situation and the resulting restrictions persist.

Even in this scenario, Matule considered that, at this moment, privatization of LAM is out of the question, not least because the company has a strategic mission to keep the country always connected, via air, even in situations where some provinces do not offer economically viable routes.

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