Mozambique’s flag carrier, Linhas Aéreas de Moçambique (LAM), is to be handed over to new management in a bid to rein in its US$300 million debt and rejuvenate its ailing fleet.
VOA’s Portuguese service reports that the new management company will be backed with South African capital.
“Right now, what we need is to restructure, realign, cut fat and stabilise the accounts”, it quoted transport minister Mateus Magala as saying.
RFI’s Portuguese language service said that the arrangement took effect immediately and that the new management structure would initially be given a year to turn the ailing airline’s fortunes around.
According to RFI, there are no immediate plans to privatise LAM.
“If we decided to privatise we would be losing an asset that has a very high value, but which at the moment does not have that value”, Magala said.
LAM has struggled with debt for years. In 2016, it put aircraft acquisition and network expansion plans on hold in order to cope with mounting losses.