Regulator Penalises LAM For Unlawful Domestic Flight Surcharges And Investigation Obstruction

Mozambique’s Competition Regulatory Authority (ARC) has fined LAM a total of R3 million for illegally levying a surcharge and for obstructing an official investigation. 

According to Club of Mozambique, ARC found that LAM continued to apply a surchage, in some cases up to 60% of the ticket price, on domestic flights, even after the government banned it in 2021. 

LAM claimed the surcharge was intended to increase revenue and cover operational and social responsibility costs, including fuel and salaries. 

The regulatory authority declared that there was no legal or financial basis for the surcharge, and accused LAM of exploiting passengers and abusing its dominant market position. It fined the airline R2,3 million for the undue collection of the surcharge and told the airline to scrap it within the next two months. 

Furthermore, ARC fined the airline a further R700 000 for failing to submit documents and information requested during the investigation.  

The case was referred to the Attorney General’s Office, which may take further action if more evidence of irregularities emerges.  

The chairman of LAM's Management Committee, Dane Kondic, said that the airline will appeal the sanctions imposed by ARC, alleging that the regulator failed to take into account the facts presented in the defence. 

Kondic said the appeal will be based on LAM's minority share of Mozambique's domestic market compared with South African carriers, and the surcharge’s implementation by previous LAM administrations.