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Ethiopian Airways Crash Report: It’s all crumbling on Boeing 737-Max model

The investigation into the Ethiopian Airways crash that killed all 157 passengers onboard in February 2019, has shown that the deadly crash is all Boeing’s fault.

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Shareholders sue Boeing, Ethiopian preliminary findings, Boeing 737-Max model crash, Ethiopian Airlines Insurance

The investigation into the Ethiopian Airways crash that killed all 157 passengers onboard in February 2019, has shown that the deadly crash is all Boeing‘s fault; ruling out a possible contributing factor from the pilots.

The probe had been carried out to ascertain the cause of the crash, in order to identify the roles played by Boeing‘s technology and the pilots of Ethiopian Airways in the crash. Although the report didn’t blame any party, it, however, absolved the Pilots of any fault.

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Why the report didn’t blame Boeing outrightly

International rules require civil probes to focus on technical recommendations for safer flight rather than pointing fingers, Reuters reported.

But still, the findings, which is not the final probe, only directed its recommendations to Boeing alone – helping various aviation regulators to streamline their focus.

The recommendations include the following:

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  • They suggested that Boeing review the flight control system
  • and that aviation authorities should confirm any changes before allowing the Boeing Max model plane back into their airspace.

Why pilots are not to be blamed for the crash: There were earlier speculations that the Pilots might not have handled the emergency period as required. However, the report stated that the Pilot performed every procedure provided by the plane manufacturer.

According to Ethiopia’s Transport Minister who presented the outlines of the preliminary report during a news conference earlier today:

“The crew performed all the procedures repeatedly provided by the manufacturer but was not able to control the aircraft.”

Why the fault rest with Boeing

The Pilot did everything they could to stabilise the plane during the emergency. But Boeing‘s jet software, MCAS, issued repetitive nose-down commands which led to the crash.

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Similar occurrence with Lion Air crashLion Air was the first Boeing 737-Max model to crash, killing all 189 passengers on board. Preliminary reports on the crash also blamed the MCAS software, after it was reported that the Lion Air Pilots lost control after grappling with the software.

What is MCAS?: MCAS is a new automated anti-stall feature that repeatedly lowers the nose of the aircraft based on faulty data from a sensor.

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Several airline operators are backing Boeing

Since the crash, several airline operators across the world have thrown their weight behind Boeing. Among these airline operators is Nigeria’s Air Peace who recently signed a deal with Brazil plane maker, Embraer SA for delivery of ten E195-E2 jets.

Patricia

Air Peace argued that it is too early to conclude on the next action to take. The company ordered for Boeing 737-Max model in 2018, stating that the order was made because of the value the Max model has in the aviation industry.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: fakoyejo.olalekan@nairametrics.com.

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Around the World

Who will ruin the OPEC+ party?

Russia has always been the black sheep in the OPEC+ family as they tend to ever deviate from consensual commitment concerning the oil market.

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OPEC+

The stage is set for OPEC+ to virtually meet on the 4th of June to discuss the extension of output cuts. The previous agreement on curbs resulted in a historic reduction of 9.7m barrels per day. Compliance has been commendable even to the point where some nations started shutting production before the effective date. The meeting in April was an emergency meeting after the diplomatic intervention by Donald Trump, who needed to save the energy industry in the United States.

This week’s meeting does not have any dramatic buildup to it (although the date has been brought forward to factor certain fundamentals). Still, there is a consensus or belief that the meeting will be successful, which is why prices have soared in the last couple of days. On Tuesday, Oil prices closed in on three-month highs because of the positive anticipation that OPEC+ producers would conclude in the extension of the production cuts at the forthcoming meeting. Brent Oil broke the $39 range, which has not been feasible since March.

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READ ALSO: Subsidy and PIB

But energy analysts and traders familiar with the history of OPEC meetings know very well that surprises and disagreements can spring up during the sessions and can negatively affect prices. To recall the last two meetings, the first meeting in March that led to the crash of prices from $50 to $32 after the discord between Russia and Saudi Arabia were Russia did not believe cuts were necessary to salvage the demand destruction caused by the coronavirus. The second meeting, which is the more recent, featured a Mexican standoff were Mexico would defiantly not accept their part in the global cuts. It took efforts by Trump (again) to agree to shoulder some of the cuts imposed on Mexico.

Skeptics believe Russia might be this week’s party pooper. Russia has always been the black sheep in the OPEC+ family as they tend to ever deviate from consensual commitment concerning the oil market. On Wednesday, Oil was observed to retreat by more than 4%, after reports suggested that Russia was mulling over easing production cuts as planned in July. Russian Minister, Novak expressed how the country expects global supply and demand to balance in June and July. This optimism is shared amongst Russian industry players who have felt the pains of output cuts, especially producers who must maneuver shutting down many wells without causing damage to the oil fields.  To be fair, Russia is responsible for about a quarter of the total OPEC+ cuts and prices at these levels still negatively impacts the Russian budget.

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READ MORE: Global oil market to re-balance in 2 months’ time

Although scaling back curbs is line with the OPEC+ deal and demand picking up globally as expressed by the Russian Energy Minister is true, it would be a classic tale of Russian Roulette if countries ease back on production cuts. The market demand must fully recover. There is still a shortage demand for consumption for jet fuel as airlines are not operating at normal levels, with experts saying it would take years before the airline industry recovers. History suggests we should be cautious with Russia. Moscow is solely interested in increasing market share and winning its veiled rivalry with U.S shale oil.  In the short-term, Russia’s defiance in February is why we are at these levels.

It is no surprise that Saudi Arabia Crown Prince Mohammed Bin Salman and United States President Donald Trump individually have had calls with Russia’s President on the need for coordination and cooperation in the oil markets days before the OPEC+ meeting. It seems that these discussions have been positive, and prices have reacted in this manner. Head of Oil market analysis at Rystad Energy, Bjornar Tonhaugen affirmed that “at this stage, there are two only variables that can significantly move prices, which are “Hints on the direction at this meeting and the outcome, and the rate of the shut production’s reactivation.”

READ ALSO: Ajaokuta’s completion to kick off as Russia provides funds

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Oil Bear traders would be monitoring this meeting; any sign of disagreement would be treated with selling pressure. However, a successful meeting does not mean an immediate rise in price because the success has already been “priced in.” Hopefully, we have a successful meeting. Oil prices need back to back rallies to sustain its ascension to the top. Nigeria needs this, the OPEC cartel needs this, Shale oil companies need this, and the Kremlin budget needs this too.

Patricia

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Business News

UAC of Nigeria Plc. Announces Annual General Meeting

Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House No. 1-5 Odunlami Street, on Wednesday, 15th July, 2020

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CONSUMERS|UACN: Weak operating performance, UAC of Nigeria Plc. Announces Annual General Meeting

UAC of Nigeria Plc., today, notified the public that the next Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House (12th Floor), No. 1-5 Odunlami Street, Lagos, Nigeria on Wednesday, 15th July 2020 at 10.00 o’clock in the forenoon in order to transact the following businesses:

Here are the agenda for the meeting scheduled by UAC Of Nigeria Plc.

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READ ALSO: Fines: NSE makes over N154 million from banks, others

  1. To lay before the Members the Report of the Directors, the Consolidated Statement of Financial Position of the Company as at 31st December 2019, together with the Consolidated Statement of Comprehensive Income for the year ended on that date and the Reports of the Auditors and the Audit Committee thereon.
  2. To declare a Dividend.
  3. To elect & re-elect Directors.
  4. To authorize the Directors to fix the remuneration of the Auditors.
  5. To elect Members of the Audit Committee.
  6. To fix the remuneration of the Directors.
  7. To renew the general mandate authorizing the Company to enter into recurrent transactions which are of a trading nature or those necessary for its day to day operations with related parties or companies in accordance with the Rules of the Nigerian Stock Exchange governing transactions with related parties or interested persons.

It will be recalled that UAC of Nigeria Plc reported FY 2019 revenue of N79.2 billion while the reported Pre-tax Profit of N7.5 billion. A loss of N14.6 billion arising from discontinued operations (UPDC) led to a net loss of N9.3 billion in FY 2019. Excluding the loss from discontinued operations, the company made a Net Profit of N5.3 billion (up 26% y/y) in FY 2019.

 

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Companies

Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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Nigeria's banks, Account Maintenance Charges

Nigeria’s tier-1 banks — comprised of First Bank, UBA, GTBank, Access Bank, and Zenith Bank (FUGAZ) — generated a total of N18.4 billion from bank maintenance charges in Q1 2020. The sum is 17.12% more than N15.6 billion that was generated by the five banks during the comparable period in 2019.

This is according to recent checks by Nairametrics Research, a breakdown of which revealed that Zenith Bank generated the most income from account maintenance fees, followed by Access Bank and then, GTBank.

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See the breakdown below.

  • Zenith Bank Plc: N5.7 billion
  • Access Bank Plc: N3.9 billion
  • Guaranty Trust Bank Plc: N3.3 billion
  • First Bank Plc: N3.1 billion
  • United Bank for Africa Plc: N2.3 billion

READ MORE: Stocktaking: Ebenezer Onyeagwu’s year as CEO of Zenith bank

What you should know about account maintenance charges

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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According to the latest directive by the Central Bank of Nigeria on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille. What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

“Current Account Maintenance Fee (CAMF): Applicable to current accounts ONLY in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. Note that CAMF is not applicable to Savings Accounts,” said part of the CBN directive.

(READ THIS: You must know these terms if you want to own a bank account in Nigeria)

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Customers don’t like account maintenance charges

Interestingly, a lot of Nigerian bank customers are not keen on bank maintenance charges. After all, nobody likes to get debit alerts, especially so when such is coming from their banks. Perhaps, the main reason some customers dislike bank maintenance charges is because they tend to be higher than the interest capitalised entitled to such customers. Professor Ayobami Ojebode of the Department of  Communications and Language Arts, University of Ibadan, recently complained about this, saying:

“Dear bank, I see o! Don’t think I don’t see you! You credit me N50 interest on my savings and debit N150 for account maintenance & card fee etc! Come here, what do you really think you are doing?”

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Patricia
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