A morale victory...

If you think of the toughest experiences airline employees can go through, a fatal air crash when that accident could have been pilot suicide, or a financial grounding, would probably top the list.
Staff at LAM Mozambique have been through both.
“I wanted to meet the people working for the airline but not the way I did,” said João Carlos Pó Jorge. “I arrived on the 15th. The accident was on 29th [November 2013].”
At the time, he had just rejoined LAM as chief operating officer (COO).
A one-year-old LAM Embraer 190 had taken off from Maputo bound for Luanda, Angola. The wreckage was found in Bwabwata National Park in Namibia. None of the six crew and 27 passengers survived.
“The inputs to the auto-flight systems by the crew member, believed to be the captain, who remained alone in the cockpit when the person, believed to be the co-pilot, requested to go to the lavatory, caused the aircraft to depart from cruise flight to a sustained controlled descent and subsequent collision with the terrain,” says the final accident report. The captain had manually changed the altitude three times, ending at 592 feet, and altered the speed until it was close to the aircraft’s maximum operating limit. Pilot suicide was suspected, yet questions remain.
“The accident is still non-conclusive,” Pó Jorge said. “There are very strong indications of a similarity with Germanwings [a pilot-suicide] but, in the case of Germanwings, we have palpable substantiation. In this case, we couldn’t find anything.”
The events of that day brought mental health into sharp focus. “I met every crew [member], every day, to make sure the pilots were willing to fly. I said don’t fly… if you’re not prepared, don’t fly.”
LAM’s insurers covered the cost of the accident. A South African Boeing 737-300 was brought in and the operational impact was minimal. LAM had no competitors. Costs increased, but not significantly.
However, the psychological impact was huge. “For LAM, it was terrible, because we hadn’t had a significant accident for many, many years. We’d had small losses, but not like that one.”
Pó Jorge has a long history with LAM. He joined as an engineering intern in July 1983, leaving more than a decade later in June 1995. After that, he became United Technologies assistant customer service manager for Africa. He rejoined LAM in 2013, this time as COO, just as the accident happened, and left again in February 2016, although he continued as an advisor.
By July 2018, LAM Mozambique was struggling to pay essential bills, like fuel and landing fees. Demand had been expected to grow, but commodity prices went down, delaying big oil and gas projects. LAM kept postponing three 737-700s that it had on order, but high-cost historic debts and the economic downturn created “very, very strong” financial pressure.

“Some days, we didn’t fly,” Pó Jorge said. This affected customer confidence, reducing demand even further. Then Fastjet arrived as a new competitor in late 2017, forcing LAM to cut ticket prices.
After the most recent grounding on July 5, the government removed the entire board and Pó Jorge was hired as CEO. Once again, he found himself in the middle of a crisis. Things did not look good and morale was low.
The brief for his 18-month term, which runs until January 2020, was clear. The government wanted a safe airline, with satisfied customers and – at the very least – breakeven financial results.
But Pó Jorge had seen how the grounding had affected LAM’s staff and this was his top priority. “I said I needed two weeks.”
In that time, Pó Jorge travelled to nearly all the airline’s stations and spoke to every member of staff, either in person or by phone. He recognised the emotional impact of the grounding. “The employees, of course, were very shocked. They had no information about where the airline was going,” he explained.
Pó Jorge believes in people. The airline had no money, yet he took a gamble and gave his staff a 10% pay rise.
“This was actually one of the first steps that I took with the shareholders. I am very pleased they accepted it. We increased wages. I said ‘look, the current situation of the balance sheet doesn’t justify this but I will promise that they will produce this [money] in the first three months.’ They did it, you know, it was amazing.”
This act of faith boosted staff morale. “I really didn’t do much, but the [airline] reliability went from ‘very bad’ to 90%,” Pó Jorge said.
The savings in passenger hotel bills alone were enough to offset the higher salaries. “From an accounting point of view, that was immediately justifiable.”
Until September 30, LAM’s schedule was being rewritten almost every other day. A new schedule was published and, this time, it stuck. LAM regained some fuel supplies, tankered fuel, or carried limited loads.
By November 2018, reliability was tracking at around 90%, but Pó Jorge remains realistic. “Mid-80s is good for us. We have restrictions. We can’t actually access everything we want. We can’t just pick up the phone and say ‘bring an aircraft’ – our balance sheet doesn’t support that.”
However, cost savings need to come from somewhere. LAM employs around 900 people and operates just four aircraft. “That’s quite a lot of people who are employed per flight, per aircraft,” he admitted.
Rather than chasing small cost savings with high emotional impact, Pó Jorge is focusing on gentler – but significant – corporate savings, such as phone costs, global distribution service (GDS) booking oversight and fuel efficiency.
“Lots of booking were being made and not ticketed, so we did automatic cancellations. We can save several tens of thousands of dollars just by asking travel agencies to be more accountable. We also introduced a fuel-savings programme. We had one, but it was not followed. We didn’t monitor it – now we are monitoring it.”
LAM is planning to form a joint-venture for its airport lounges and perform more third-party work, like aircraft cleaning, to use the people it has more effectively. This has become even more important since the government opened the domestic market to foreign competitors, like Ethiopian Airlines’ new Mozambique airline.
“I went to Ethiopia in late September and my offer was to cooperate, probably by doing a schedule to tie-in with their Addis Ababa hub, feeding them passengers and cargo. If that doesn’t work, we’ll probably go to other big networks, like Kenya Airways or Emirates.”

Pó Jorge is also looking for cooperation within LAM, asking his staff to make peace with one another. Tensions have been high, because people had to fight for the resources to do their jobs. “Our meetings start with saying hello, good morning, thank you and I’m sorry,” he said.
The psychologists, who were originally brought in after the E190 accident, hold weekly mental-health meetings. “Just last Thursday, I had my own consultation. He said there’s about six to eight people, every session, asking for personal consultations.”
LAM has turned its culture around. Going to the psychologist used to be seen as a negative, but now it is actively encouraged. “I’m very pleased with that,” Pó Jorge said. “I think that’s the main thing, that people realise this is going to become a nice place to work.”