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Lusa - Business News - Mozambique: Flag carrier LAM to invest $120M in planes to build up Africa routes

Lisbon, Oct. 21, 2019 (Lusa) – Mozambique’s national airline, LAM, plans to invest up to $120 million (€109 million) in new planes to build up its presence in Africa, and aims to link South Africa and Lisbon, said its managing director on Monday.
"In Africa, we want to penetrate more into the South African market and also offer the South African market to Portugal," said João Carlos Po Jorge, in comments to Lusa on the sidelines of an event in Lisbon.
According to the LAM managing director, the company also wants to step up the frequency of flights to Dar es Salaam (Tanzania), Harare (Zimbabwe), Lusaka (Zambia), and Gaborone (Botswana).
" We are already working with these airlines [of these countries] so that, as soon as the market grows, we can offer, not only the regional market , but also this market that comes via Lisbon,” he stressed.
To grow on routes and ensure quality of service, the company will also invest in new planes.
"We are thinking of acquiring new aircraft co-financed by leasing or financed by banks and we think that represents 100 to 120 million dollars [in investment] in three years, because the fleet is still small," the LAM managing director said.
The goal now, after the group has traversed a difficult financial situation, is to focus its activity in its core business and disinvest from other areas.
"Our intention in the coming years is to focus the activity on our core business, the airline, and disinvest in some areas that we have, of hotels, etc," he said.
Po Jorge added, however, that the LAM Group also wants to have a position in the airline catering business and ground handling.
"The LAM Group currently has stakes in about 14 companies,” he explained. “We're already getting out of four or five and [with] the others it is [just] a matter of time for us to get out."
As for LAM’s financial situation, he said that it should break even this year, but that the company had accumulated losses. The planned disinvestment, which will raise about $14 million to $16 million dollars, may help offset these, "but does not cover in any way investment," he acknowledged.
However, Po Jorge said there would be no "drastic reductions" in the workforce.
"We are seeing if we can relocate some people, either within the organisation, or in other group companies,” he explained. “But we don't think we will have the excess that we [thought we] would have.”
At present, the company has a restructuring plan underway. It has been prevented from operating in European airspace, for safety reasons, but has already announced plans to return to Europe, with a flight to Lisbon this month.
Mozambique’s president, Filipe Nyusi, said as long ago as 2017 that the country needed to give more space for the private sector in air and terrestrial passenger transport.
A former CEO of LAM, José Viegas, has been accused of corruption as part of a criminal investigation into alleged improper payments by Brazilian aircraft manufacturer Embraer to some LAM managers and senior state officials, related to the acquisition of two Embraer 190 aircraft in 2008 and 2009.
Prosecutors began investigating the case after news reports that three people had received a total of $800,000 in kickbacks for the purchase by LAM of two aircraft from Embraer.


Agency : LUSA

Date : 2019-10-22 09:15:33


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