Mozambique is moving to rescue its struggling national airline, Linhas Aéreas de Moçambique (LAM), with a $130 million restructuring plan that will see a group of state-owned companies acquire a controlling stake through a newly created special-purpose vehicle (SPV).
According to Bloomberg, consortium will include Hidroeléctrica de Cahora Bassa, the country’s main hydropower producer, Caminhos de Ferro de Moçambique, the state railway operator, and Empresa Moçambicana de Seguros, a government-owned insurer.
Together, these firms will purchase 91% of LAM’s shares, with funds directed toward acquiring eight new aircraft and financing a wider turnaround strategy.
The airline has faced chronic financial difficulties for more than a decade, at times operating with as few as two aircraft.
Mozambique’s state news agency AIM reported that corruption in service acquisitions contributed significantly to the company’s woes, leaving it with debts exceeding $230 million.
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In May, the government appointed Dane Kondic, former CEO of Air Serbia, to lead LAM’s restructuring.
The move follows the termination of a contract with South African consultancy Fly Modern Ark, which had been brought in during 2023 to stabilize the airline’s operations.
A fiscal risk report published by Mozambique’s finance ministry last week classified LAM as a “high-risk” entity, emphasizing that without direct government intervention, the carrier’s survival is unlikely.
Bloomberg also confirmed details of the state-backed consortium’s role in the bailout plan.
Despite the challenges, officials are positioning the $130 million SPV strategy as a decisive step toward restoring LAM’s viability and ensuring the airline can expand its fleet while regaining credibility in both regional and international aviation markets.
IMage Credit: ATQ News
