LAM Mozambique curbs fleet, network expansion over debts

LAM has put all fleet and network expansion plans on hold while it deals with growing losses, reports ch-aviation.

Chairman Antonio Pinto de Abreu said the state-owned carrier had USD160 million worth of debt at the beginning of the year although this figure has now been brought down to USD139 million.

“LAM is not in a healthy situation," he said. "Accounts for 2015 show the company running a deficit which can be attributed to structural reasons,” said de Abreu.

He added that LAM's decision to acquire a trio of B737 NextGen aircraft (initially B737-700s then converted to B737-800s) from Boeing was partly to blame for its dire financial situation.

“LAM has decided to retreat from the decision to buy new aircraft, the first of which was to have arrived in November, because it does not have the financial means to pay for them," de Abreu said adding that talks were underway with the US manufacturer to recover some of the down payments already made.