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Fake Visas Cost RwandAir Over N8b on Lagos-Dubai Route

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  • Fake Visas Cost RwandAir Over N8b on Lagos-Dubai Route
  • Carrier May Withdraw New A330 From Nigeria 

Fake entry visas carried by Nigerians travelling to Dubai, the United Arab Emirates, has cost an African carrier, RwandAir, a penalty in excess of $20 million (N8 billion) in the last six months.

The fake visas, coupled with fictitious online bookings, are considered as infractions that warrant penalty by international aviation rules guiding the Global Distribution System (GDS), and borne by the conveying airline.

A GDS is a network operated by a company that enables automated transactions between travel service providers (mainly airlines, hotels and car rental companies) and travel agencies. Multiple reservations also attract multiple charges against the airline.

For every passenger that arrives in Dubai without valid visa or forged papers and ultimately turned back at the port of entry, the airline pays a penalty of $30,000 (N1.2million) for the Advance Debit Memo (ADM) issued per passenger.

Also, the airline is considering the withdrawal of its new Airbus 330-200 that was recently deployed to the Lagos route over low patronage, as recession is making it difficult to fill the 240-passenger capacity aircraft.

Recall that the Kigali-based airline is one of the foreign carriers making waves on the continent, with heavy reliance on Nigeria for its market. With Nigeria supplying the lion share of its total passenger supply for 2015, the airline had deployed two new A330-200s to the Lagos routes.

Plans were in the offing to bring in the third aircraft this December for the passengers heading to China, India and other countries.A Sales Executive of RwandAir, Henry Aaron, said it was regrettable that the airline had paid $20 million from July till date for the mistakes the airline knows nothing about.

Aaron said the penalty imposed on the airline was due to the “smart activities” of its passengers and their cohorts in Dubai, who are playing all gimmicks to outwit the airline’s clearance to board.

Aaron explained that there are some “smart guys” in Dubai processing working visas for wiling Nigerians. At the point of booking, the visas are genuine, but would have been cancelled from the system and become fake before the passenger reached Dubai airport.

“It is a smart move. Once it is cancelled, the person has no way of entering. As an airline that has carried the passenger on a one-way ticket, for every case like that, we are charged $30,000 for each passenger. I also have to fly the person back to Nigeria for free. That is the problem,” he said.

While the problem is not peculiar to RwandAir, the airline is having more of the effect as a foreign airline and co-competitor on the UAE market.Emirates and other UAE airlines also face similar problems, although at minimal rates, but as home grown airlines, they will always find their way around without paying penalties.

Aaron added that the airline even introduced an Okay-To-Board clause to curb the challenge, but Nigerians still found their way around it. “Okay-To-Board issue simply means that we collect your visa and working permits 48 hours before you board and present them to your employer in Dubai to okay before we allow you board. It is working but our Nigerian guys are so good.

“What they do is that they would look for someone in the organisation, tip the person to issue and monitor the permit without the knowledge of the employer. Some hours before the plane is due to arrive; they would extract the permit and cancel the visa. It becomes a problem for us and we are paying heavily for it,” he said.

The airline in the last five years of operations in Nigeria, had been having the problem, which escalated this year.The National President of the National Association of Nigerian Travel Agencies (NANTA), Bankole Bernard, said that the challenges faced by RwandAir were unfortunate, but would be addressed when travel agencies and airlines cooperated.

Aaron disclosed that the airline had suffered a lot of losses in the last few months paying ADM to the GDS. “At the end of the day, we don’t really have profit to take home just because we are paying for errors not made by us but by our travel partners that are making the mistake ignorantly.

Between July and October, we have been paying close to $20million to various GDSs as penalties,” adding that profit margin in aviation is very slim, as at the best of time, it ranges between four and six per cent.

To cut down on the losses, he said that the airline is introducing $5 (N2000) on each segment of its online bookings. Lagos-Dubai return ticket for instance, that is, Lagos-Kigali, Kigali-Dubai, Dubai-Kigali and Kagali-Lagos, will all attract $20 (N8000).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

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Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.

The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.

According to Michael McCarthy, the Chief Market Strategies, CMC Markets, the surged in gold price is a result of the projected drop in dollar value or uncertainty.

He said, “The key factor appears to be the (U.S.) currency.”

As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.

Also, the effectiveness of the vaccines can not be ascertained until wider rollout.

Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.

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Crude Oil

Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

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Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.

Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.

While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.

On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”

“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.

Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.

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Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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