Dane Kondić, the Australian-born former CEO of euroAtlantic Airways and Air Serbia, has been appointed to lead the rescue of LAM - Linhas Aéreas de Moçambique (TM, Maputo) in the third management change at the struggling state-owned airline in ten months.

This follows the Mozambican government's appointment of international consultancy Knighthood Global, led by former Etihad Airways CEO James Hogan, a fellow Australian, to revitalise the airline.

Kondić and Hogan worked together through Etihad Airways' strategic investment in Air Serbia in 2013, with Hogan also serving as vice chairman of Air Serbia while Kondic was CEO.

The new management coincides with the immediate removal of LAM chairman Marcelino Gildo Alberto and directors Altino Xavier Mavile and Bruno Miranda following a decision taken at an extraordinary general meeting on May 13, according to a statement issued by IGEPE, the Mozambican government institution responsible for managing and overseeing state-owned enterprises.

A new non-executive board has been appointed composed of representatives of LAM's new shareholders, the state-owned hydro-electric scheme operator Hidroeléctrica de Cahora Bassa (HCB), national ports and railway operator Portos e Caminhos de Ferro de Moçambique EP (CFM), and national insurer Empresa Moçambicana de Seguros SA (EMBOSE).

Kondić has been appointed chairman of the new management committee, with Lucas Antonio Francisco responsible for administration and finance, and Hilário Devis Tembe for technical and operational matters.

This is the third management change since July 2024, when Americo Muchanga took over from Fly Modern Ark (Johannesburg O.R. Tambo) CEO Theunis Crous who had acted as interim CEO following the removal of João Carlos Pó Jorge.

In an earlier statement, Knighthood Global said its focus in the first three months would be to stabilise and reposition LAM and re-establish its fleet. Its priority would be to work with the airline’s new state-owned shareholders, which have a mandate to procure the appropriate aircraft to reboot the fleet.

"Stakeholder engagement and governance will crucially underpin the advisory process in order to recreate confidence in LAM’s transformation and align all parties behind a single strategy and to address issues of the past," the consultancy said. "In addition, the right connectivity will support tourism to Mozambique, and importantly, support the development and growth in other key sectors, including mining, oil, and agriculture."

Debts, delays, and discounted fares

LAM has been recording financial losses for years and is burdened with an estimated debt of around USD300 million. Operational issues include a reduced fleet, a lack of investment, frequent flight cancellations, delays, and high senior management turnover.

The previous government in 2023 appointed FMA to help restructure the airline, which resulted in management changes, fraud allegations surrounding a ticketing scam, and discounted fares on routes operated with expensive wet-leases. During its tenure, FMA helped keep the airline operational, but could not fully reverse longstanding problems. In September 2023, FMA released a five-year plan to grow the fleet to 22 aircraft via operating leases.

Post-FMA, LAM has struggled to maintain operational improvements, with reports of mismanagement and failure to implement cost-control measures introduced during the restructuring. FMA is currently suing the airline, claiming it was paid only half of the final agreed fee. The firm's appointment is also under investigation by Mozambique’s Public Prosecutor’s Office.

The new government elected in October 2024 is pursuing a public-sector-led restructuring and recapitalisation plan supported by a forensic audit to restore the airline’s viability. It has transferred 91% of LAM’s shares to the three state-owned companies and has pledged to clean up alleged corruption, financial irregularities, and conflicts of interest within management concerning the fleet renewal plan. It also cited corruption as the reason for cancelling an international tender for the acquisition of seven pre-owned aircraft for LAM.

The airline has suspended key international and regional routes, including Maputo-Lisbon and connections to Harare International and Lusaka, due to financial pressures and operational difficulties. It currently operates with four aircraft, including only one in-house E145 operated by subsidiary MEX - Mocambique Expresso (MXE, Maputo); another E145 wet-leased from Everett Aviation (Mozambique); one CRJ900 wet-leased from CemAir; and one B737-500 wet-leased from Via Air RCA.

Knighthood Global has advised governments on airline restructurings, including the dissolution of Air Malta and establishment of KM Malta Airlines, and the attempted turnaround of Nordica. The firm recently took a strategic advisory and shareholder role in UK start-up Global Airlines. In Africa, the company has provided a restructuring plan to Air Zimbabwe and has joined the African Airlines Association (AFRAA).