3 December 2018

Mozambique: Ethiopian Airlines Undercuts LAM Prices

Photo: Ethiopian Airlines
Africa’s First Ethiopian B787-9 at Addis Ababa Bole International Airport.

Maputo — Ethiopian Mozambique Airlines (EMA), the local subsidiary of Ethiopian Airlines, is selling tickets for Mozambican domestic routes at prices much cheaper than those charged by Mozambique Airlines (LAM).

The independent newssheet "Carta de Mocambique" made bookings with both airlines, and found that a return ticket from Maputo to Nampula cost 19,207 meticais (about 315 US dollars) on EMA, but 21,380 meticais on LAM. The difference was much larger on flights to the western city of Tete.

A Maputo-Tete return ticket cost only 17,802 meticais on EMA, but the price was 28,808 meticais on LAM. It is thus 10.2 per cent cheaper to use EMA when flying to Nampula, and 38 per cent cheaper when flying to Tete.

An official at EMA told the paper that EMA's goal is to sell its tickets at half the price charged by LAM.

EMA began operating the Mozambican domestic routes on Saturday, using two Bombardier Q400 New Generation aircraft, each of which can seat 70 people. It is flying between Maputo and Beira, Nampula, Tete, Quelimane and Pemba.

Although EMA is registered in Mozambique it is completely tied in to the operations of its mother company. It is using Ethiopian Airlines logistics, and selling EMA tickets at the Ethiopian Airlines counters at Maputo Airport. The EMA sales code is the same as that for Ethiopian Airlines, so that all payments made electronically go straight to the accounts of the mother company in Addis Ababa.

The LAM trade union committee has complained that the EMA operation is illegal, but the chairperson of the regulatory body, the Mozambique Civil Aviation Institute (IACM), Joao de Abreu, dismisses such complaints. As far as he is concerned, EMA is a perfectly legitimate company, registered in Mozambique, and not a foreign intruder. He denied that the Mozambican state is showing any favouritism to EMA.

Abreu said it took nine months to certify EMA, and the company followed all the steps necessary to meet the requirements of Mozambican civil aviation legislation. This certification involves checking such matters as aircraft maintenance and safety, the financial situation of the company, and a study of the market. In the case of EMA, "this was all checked minutely", said Abreu.

LAM once had an effective monopoly on the Mozambican domestic routes. The government began to liberalise Mozambican air space in 2011, but serious competition with LAM only really took off this year, when the London based company Fastjet began operations on the main domestic routes.

LAM, EMA and Fastjet are competing for a rather small market. It is estimated that the domestic routes carry about 700,000 passengers a year.

The domestic terminal at Maputo airport can certainly accommodate more flights, since it has 14 check-in counters and four gates, many of which are unused for much of the day.

Under its new general manager, Joao Po Jorge, LAM is cleaning up its tarnished reputation, and now claims a punctuality rate of over 90 per cent for its flights. It remain to be seen how it will react to the competition from EMA, and whether it will be tempted to slash its own prices.

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