The company Moçambique Expresso (Mex), known for operating domestic and regional flights, has announced the total suspension of its operations from 31 August, according to internal sources. This decision comes amid disagreements with LAM, the state-owned company of which it is a subsidiary.
Mex's board, at a meeting held on 30 August, resolved to halt its activities, a decision that was officially communicated by the airline's administration, led by chief executive Faustino Massitela.
Mex, which has a fleet of three Embraer 145 aircraft, has provided significant services to LAM, which is currently facing serious financial problems. In April, the government decided to place LAM under the administration of South Africa's Fly Modern Ark (FMA).
As well as providing medium-sized aircraft to LAM, Mex also offers ground handling and various other services. However, the company has been facing financial difficulties, receiving only an amount that partially covers its employees' salaries.
The failure to transfer adequate sums to Mex has created a liquidity shortfall, compromising its ability to honour commitments to suppliers and putting the company at risk of ceasing operations.
Since the beginning of June, a significant reduction has been noted in LAM's use of Mex's fleet, a situation that compromises Mex's ability to generate enough revenue to cover its costs, as well as leading to under-use of the available financial resources.
Mex has accumulated debts to suppliers crucial to the continuity of its operations, including companies such as Rolls-Royce, Embraer and American General Supplies. The precarious financial situation has led to a build-up of debts, one of which is a significant debt to Embraer, related to the acquisition of the ERJ145 fleet.
Mex's board has sought to resolve this situation, proposing a partial payment of the debt to Embraer. However, without a resolution of this debt, Mex is prevented from receiving or requesting any service or technical support from Embraer.
Meanwhile, Linhas Aéreas de Moçambique (LAM) has shown signs of recovery, with a significant reduction in its debt since April. The administration of Fly Modern Ark revealed that the company has managed to reduce its debt by 57 million euros, a result of correct accounting practices and compliance with international standards.
Sérgio Matos, representative of FMA, pointed out that LAM is in negotiations with Boeing for the refund of a significant sum, related to the prepayment for a new aircraft that was not delivered to the Mozambican carrier.
In recent months, LAM has recorded a 24% increase in the number of passengers carried and 10% growth in flight revenue. Although it has emerged from insolvency, the company still needs more aircraft to ensure an operation that allows it to pay off its high debt and generate profits.
FMA said it had managed to get LAM to meet the maintenance requirements for its fleet, imposed by international regulations, and to contain the costs associated with this service.
