LAM's deficit higher even ongoing restructuration

The domestic debt of Mozambique’s national airline, LAM, has seen a modest increase as the company continues to navigate a challenging restructuring process. According to recent reports, LAM’s domestic debt has grown to approximately \$92.7 million amid ongoing financial pressures and operational constraints. The Ministry of Finance has confirmed this uptick, which comes as the airline operates with a limited fleet, relying heavily on ACMI-leased aircraft such as the CRJ900 and Airbus A319.

This rise in debt is part of a broader trend affecting Mozambique’s state-owned enterprises. At the end of September, LAM accounted for about 27.22% of all internal debt held by Mozambique’s SOEs, making it one of the largest contributors alongside the national rail and ports operator and the state oil company [[1]](https://clubofmozambique.com/news/mozambique-soes-debt-rose-to-e533m-in-q3-last-year/). The airline’s financial difficulties are compounded by persistent cash flow challenges, reduced investment, and a history of operational setbacks, including maintenance issues and a shrinking fleet.

These pressures have led to significant losses for LAM, with the company recording a loss of 448.6 million meticais (€6 million) in 2022, which increased sharply the following year. The ongoing restructuring aims to address these structural weaknesses, but the process remains complex and is taking place against a backdrop of broader public debt concerns in Mozambique [[2]](https://clubofmozambique.com/news/mozambique-lams-debt-rises-0-5-in-three-months-to-e79-million/).

As the government continues to monitor and manage the debt situation, LAM’s experience highlights the urgent need for sustainable financial strategies and operational reforms within Mozambique’s aviation sector. The reliance on leased aircraft and the slow pace of restructuring underscore the challenges facing the airline as it seeks to stabilize its finances and restore long-term viability.