Summary
- Boeing is demanding $4.5 million from LAM Mozambique for alleged late payments on a parts supply contract.
- LAM only acknowledges $729,228 of the debt and offered to pay in installments, but Boeing rejected the proposal.
- The disagreement comes at a difficult time for LAM because it plans to make use of its credit with Boeing to accumulate recent planes.
Boeing and the flag carrier of Mozambique, Linhas Aéreas de Moçambique (LAM), are in disagreement over a debt regarding a parts supply contract from 2014. The American manufacturer claims a debt of $4.5 million, however the state-owned entity only recognizes just over $729,000 of it.
Boeing asks LAM to pay $4.5 million
In keeping with Portuguese news outlet Lusa, Boeing is asking LAM Mozambique to pay $4.5 million for alleged late payments on a parts supply contract signed in 2014. This was communicated through an invoice received by the airline on December 20, 2023, for an agreement that ensured the shipment of substitute equipment to repair Boeing aircraft. Nonetheless, LAM has reportedly not paid for the equipment over the past few years.
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Within the invoice, the US-based firm charged LAM $3.48 million for a selected item and claims that over 30 items and parts sent to the Southern African nation weren’t returned on time or never returned in any respect. In keeping with Lusa, this involved a deal from Amsterdam, managed by Air France/KLM.
LAM only recognizes 16% of the debt
From Boeing’s $4.5 million invoice, LAM only recognizes $729,228 for late contract rents. The carrier offered to pay the debt in installments over a selected period, but Boeing rejected this proposal. From one other document, Lusa reports that Boeing stated that every one items and equipment provided to LAM had been returned. The General Inspectorate of Mozambique’s Ministry of Transport has been made aware of the dispute and has convened meetings with the national company’s management.
Photo: Felix Lipov | Shutterstock
LAM is currently under the management of South Africa’s Fly Modern Ark (FMA), which took over in April 2023 to revitalize the national carrier. Linhas Aéreas de Moçambique has a credit of $23.5 million with Boeing from advances made between 2014 and 2019 to buy recent aircraft.
The disagreement between the parties comes at a time when FMA plans to make use of its credit to accumulate recent planes and move forward with its fleet and route expansion plans. Nonetheless, Boeing has refused to release the funds and won’t use the credit to settle a part of the debt stated within the invoice. Boeing declined to comment on the matter.
LAM Mozambique in 2023
LAM Mozambique has been a Boeing customer for several years. In keeping with ch-aviation, its current fleet comprises one B737-700 and three DHC-8-Q400s. It also has a couple of wet-leased aircraft, including a B777-200ER from EuroAtlantic Airways, used for its long-haul flights to Lisbon.
Photo: StudioPortoSabbia | Shutterstock
In 2023, the state-owned company carried roughly 601,467 passengers, an 8% increase from the previous 12 months. Regional traffic increased 48% year-on-year, reaching 111,335 in comparison with 75,481 in 2022. Domestic traffic grew by 2% to 490,132 passengers. Its busiest route by passengers carried was Maputo-Beira with 35,352 passengers, followed by Nampula-Maputo with 35,221, after which Beira-Maputo with 35,074.
LAM Mozambique Subsidiary Flying Again After Reaching Debt Agreement With Embraer
One EMB-145 has returned to the skies, operating several domestic and regional flights.
Its current network covers 12 domestic and 6 international destinations. Last 12 months, LAM launched flights to Lusaka (LUN) via Harare (HRE). December saw the return of flights to Lisbon Airport (LIS) after a 12-year hiatus, in addition to its inaugural flight to Cape Town International (CPT), marking a major milestone for the corporate.
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