AFP

British Airways on Wednesday axed another 10,300 short-haul flights up to the end of October, with the aviation sector battling staff shortages and booming demand as the pandemic recedes.

The carrier, which is owned by conglomerate International Airlines Group (IAG), added in a statement that it had now cancelled 13 percent of its total summer schedule.

BA has been among the worst affected by sector-wide turmoil, as carriers race to meet soaring demand after the lifting of Covid travel restrictions. 

“The whole aviation industry continues to face into significant challenges and we’re completely focussed on building resilience into our operation to give customers the certainty they deserve,” the airline said in a statement, having already announced hundreds of flight cancellations this summer.

The latest move meanwhile comes less than two weeks after BA staff at London Heathrow airport voted to strike over pay this summer as surging inflation erodes wages and sparks growing UK industrial unrest.

The carrier’s Heathrow ground staff voted by more than 90 percent in favour of walkouts.

Wednesday’s news also comes after the British government recently offered “slot alleviation measures” which allow carriers to temporarily reduce schedules while retaining valuable take-off and landing slots.

“While taking further action is not where we wanted to be, it’s the right thing to do for our customers and our colleagues,” BA added on Wednesday.

“This new flexibility means that we can further reduce our schedule and consolidate some of our quieter services so that we can protect as many of our holiday flights as possible.”

The group sought to reassure customers but conceded it would have a considerable impact on travel plans.

“While most of our flights are unaffected and the majority of customers will get away as planned, we don’t underestimate the impact this will have and we’re doing everything we can to get their travel plans back on track,” BA added.

“We’re in touch to apologise and offer rebooking options for new flights with us or another airline as soon as possible or issue a full refund.”

In a vote of confidence in the aviation sector’s long-term recovery, IAG last week ordered 11 Airbus A320neo aircraft and three A321neos worth $1.7 billion.

The London-listed conglomerate recently forecast a return to annual profit after narrowing Covid-induced losses as travel curbs were eased.

The group collapsed into annual losses in 2020 and 2021 as Covid ravaged global demand for international air travel, forcing BA and its peers to slash thousands of jobs.

IAG owns various airlines that also include Ireland’s Aer Lingus and Spain’s Iberia.

Recession worries pushed the price of Brent oil briefly back under $100 on Wednesday and the euro moved closer to parity with the dollar.

European stocks rebounded thanks to lower bond yields and bargain hunting, while US stocks dipped ahead of the release of the minutes of the latest US Federal Reserve meeting.

Europe’s benchmark crude oil contract, Brent North Sea, fell briefly under $100 per barrel in afternoon deals, following its US counterpart WTI which slumped below the symbolic level on Tuesday when prices plunged by nearly 10 percent on concerns that a slowing global economy will dent demand for petroleum products.

Citi analysts have forecast that Brent could strike $65 later this year in the event of a prolonged worldwide economic downturn.

Meanwhile, the euro hit a fresh 20-year low point under $1.02 — the European single currency fast closing in on parity as traders eye recession for the eurozone and the ECB’s slower moves to raise interest rates than the US Fed.

“A dip in government bond yields has paved the way for bargain hunters to swoop in and snap up European equities,” said market analyst David Madden at Equiti Capital.

Investors worried rising bond yields would crimp the ability of eurozone governments to support their economies. 

Paris stocks rose 2.0 percent while Frankfurt climbed 1.6 percent.

Nevertheless, “the mood remains febrile”, said Chris Beauchamp, chief market analyst at online trading platform IG.

“The drop in the euro and weakness in yields shows that investors remain very nervous about the economic prospects of the global economy, and the opportunistic bargain hunting in stocks may not have much staying power,” he warned.

London’s benchmark FTSE 100 index managed to gain 1.2 percent despite the political turmoil after UK Prime Minister Boris Johnson was rocked by the resignation of finance minister Rishi Sunak.

Johnson vowed to stay in office and quickly appointed new ministers.

“Political risks do not seem to be having a major impact on UK assets,” noted Markets.com analyst Neil Wilson.

“There are far too many bigger things on our minds right now — inflation, the economy slowing down, strikes.”

Britain is in the midst of nationwide strikes — affecting in particular the transport sector — as wages are eroded by the rocketing inflation.

The pound dipped below $1.18, however.

Elsewhere Wednesday, Asian equity markets closed mostly lower amid a fresh flare-up of coronavirus cases in parts of China that has seen some cities locked down as part of officials’ zero-Covid policy.

Wall Street stocks were lower in late morning trading as investors awaited key economic releases and the release of the minutes of the Federal Reserve’s last policy meeting.

Investors will be scrutinising the document for any signs that falling commodity prices might lead the Fed to be less aggressive with raising interest rates, which would lower the risk of pushing the US economy into recession.  

– Key figures at around 1530 GMT –

New York – Dow: DOWN 0.4 percent 30,850.00 points

EURO STOXX 50: UP 1.8 percent at 3,421.55

London – FTSE 100: UP 1.2 percent at 7,107.77 (close) 

Frankfurt – DAX: UP 1.6 percent at 12,594.52 (close)

Paris – CAC 40: UP 2.0 percent at 5,912.38 (close)

Tokyo – Nikkei 225: DOWN 1.2 percent at 26,107.65 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 21,586.66 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,355.35 (close)

Euro/dollar: DOWN at $1.0175 from $1.0266 on Tuesday

Euro/pound: DOWN at 85.49 pence from 85.85 pence

Dollar/yen: DOWN at 135.72 yen from 135.87 yen

Pound/dollar: DOWN at $1.1897 from $1.1956

Brent North Sea crude: DOWN 2.5 percent at $100.20 per barrel

West Texas Intermediate: DOWN 2.8 percent at $96.73 per barrel

burs-rl/har

Suspected Boko Haram jihadists using guns and explosives have blasted their way into a prison near Nigeria’s capital, freeing hundreds of inmates in an operation to release jailed comrades, the government said Wednesday.

Tuesday night’s brazen attack on the outskirts of Abuja came hours after an ambush on a presidential security convoy in the northwest, in a startling illustration of the struggle Nigeria faces to overcome a security crisis.

Residents reported loud explosions and gunfire late Tuesday near the Kuje medium-security prison just outside the capital.

President Muhammadu Buhari on Wednesday briefly visited the prison, where the burnt-out wreckage of a bus and cars marked the scene of the attack, and yellow police tape was stretched across a destroyed part of the prison perimeter.

“We understand they are Boko Haram, they came specifically for their co-conspirators,” senior interior ministry official Shuaibu Belgore told reporters on a visit to the prison.

He said around 300 inmates had been recaptured or had surrendered out of about 600 who had escaped initially.

Boko Haram is one of the jihadist groups involved in Nigeria’s grinding 13-year conflict in the country’s northeast.

But Nigerian officials sometimes use “Boko Haram” as a general phrase to refer to jihadists or other armed groups.

– ‘All escaped’ –

Defence Minister Bashir Magashi told reporters that Boko Haram militants had “mostly likely” carried out the attack and that all 64 jailed jihadists in the prison had escaped.

“None of them are inside the prison, they have all escaped,” he said.

Commanders of another jihadist group Ansaru, including the group’s chief Khalid Barnawi, had also been kept in Kuje prison since their conviction in 2017.

One security official was killed when the gunmen breached the jail using high-grade explosives.

“We heard shooting on my street. We thought it was armed robbers,” a local resident said. “The first explosion came after the shooting. Then a second one sounded and then a third.”

Some prisoners surrendered while others were recaptured with military roadblocks set up around the penitentiary.

Security forces sent back around 19 recaptured inmates in a black van on Wednesday morning, an AFP correspondent at the site said.

Former top police commander Abba Kyari, who was being held in Kuje awaiting trial in a high-profile drug smuggling case, was still in custody, corrections service spokesman Abubakar Umar said. 

– ‘Ambush positions’ –

Nigeria’s security forces are battling Boko Haram and Islamic State West Africa Province (ISWAP) jihadists in the country’s northeast, where the conflict has killed 40,000 people and displaced 2.2 million more.

The overstretched military is also battling heavily armed criminal gangs known locally as bandits who terrorise communities in the northwest and central states with raids and mass kidnappings for ransom.

In the country’s southeast, troops are dealing with separatist militias who demand an independent territory for the local ethnic Igbo people.

The Kuje prison raid took place soon after gunmen also ambushed an advance presidential security detail preparing for Buhari’s visit to his home state of northwestern Katsina.

Buhari was not in the convoy, but two officials were slightly wounded in the attack. It was not clear who was responsible.

“The attackers opened fire on the convoy from ambush positions but were repelled,” the presidency said in a statement.

Attacks on prisons in Nigeria have happened in the past, with gunmen seeking to free inmates.

More than 1,800 prisoners escaped last year after heavily armed men attacked a prison in southeast Nigeria using explosives.

The attackers blasted their way into the Owerri prison in Imo state, engaging guards in a gun battle before storming the prison. Imo state lies in a region that is a hotbed for separatist groups.

Fuel prices soared in Ethiopia on Wednesday after the government reduced subsidies, adding to economic hardship for people already struggling with high inflation.

There were long queues at petrol stations in the capital Addis Ababa, with drivers reporting shortages as they tried to fill up their tanks.

The price of petrol at the pump jumped almost 30 percent to 48.83 biir (about 94 US cents) while diesel went up almost 40 percent to 49.02 birr under the new price regime that will run to August 6, the trade ministry said.

The federal government — which had already hiked prices in May — plans to lift fuel subsidies progressively, according to the Addis Fortune business newspaper.

Prices of fuel, food and other basic goods have rocketed globally because of the Ukraine war, hitting vulnerable countries in Africa and elsewhere.

The trade ministry said the cost of fuel for Ethiopian consumers should be almost double if it was calculated on current global prices.

“But considering the state the country is in, the government is covering 75 percent of the (price) difference while it was decided that the remaining 25 percent would be transferred to consumers,” it said.

Henok Girma, 26, said he had been waiting in line at a petrol station in Addis Ababa for an hour and a half.

“At most of the gas stations, there is a long queue. I don’t know what the problem but there is a shortage,” he said. 

“Whenever I want to fill up with gas, I will have to wake up early in the morning or wait like this for hours.” 

Businessman Mekibib Abebe added: “Sometimes you can wait for half a day and may not find fuel at the end.

“The obligation of the government is to provide fuel, or at least control how gas stations provide fuel properly.” 

The Horn of Africa country of more than 110 million people has seen inflation hovering at around 35 percent over the past six months, with food prices in particular registering a sharp rise.

The global surge in prices for basic goods has also eaten into the foreign exchange reserves of the largely importing nation.

In a report covering the first quarter of 2022, Ethiopian investment fund Cepheus Capital said that in December, foreign currency reserves at the central bank were at their lowest in a decade.

Imports of petroleum products in the first nine months of the 2021/2022 fiscal year had jumped by 75 percent to $2.2 billion, and those of cereals by 121 percent to $1.8 billion, it said.

Unable to switch on lights or heaters, cook dinner or charge their phones, South Africans are spending their mid-winter evenings plunged in darkness and low-tech living.

Power outages, known here as load shedding, intensified late last month after strikes erupted at the nation’s monopoly energy provider Eskom, leaving coal plants unable to operate or undergo maintenance. 

Electricity cuts in South Africa are a notorious, years-old problem.

But the frequency of power losses — two to three times per day and lasting up to four hours at a time — is the worst since a bleak episode in December 2019, and many people are livid.

“It’s like we’re back to apartheid life, whereby we’re back to candles, paraffin stoves,” said Rebecca Bheki-Mogotho, a Johannesburg city employee.

Her comparison was with life under South Africa’s former segrationist regime, which deprived the black majority of basic infrastructure and services.

The leading economy on the continent, South Africa relies on coal to generate more than 80 percent of its electricity. 

The country has plenty of coal, but most of its plants are ageing, need repair or are scheduled to be decommissioned in the coming decades.

“We didn’t do what we should have done in the past five to 10 years,” energy analyst Clyde Mallinson told AFP. 

“We’ve got ourselves caught in a situation where we are desperately trying to plug what’s broken rather than get ahead of it.”

– 101 days of blackouts –

The wage dispute that compounded the crisis concluded Tuesday with Eskom employees accepting a seven percent increase, which the electricity provider said in a statement “will be a struggle for Eskom to afford.”

But even with workers back on the job, Eskom warned it would “still take some time” for the system to recover due to the backlog of maintenance.

The public entity is already laden with debt and struggling to recover from years of alleged mismanagement and corruption, which made it a key entity investigated during a four-year public inquiry into state graft.

To bridge the severe gap in supply, Eskom is relying on back-up gas turbines that blast through 14 litres of diesel (3.7 gallons) per second. Seven of these turbines were in operation Friday. 

The cost of using diesel as a substitute fuel has been stratospheric. 

Eskom CEO Andre de Ruyter said the company spent 1.54 billion rand ($93.8 million) in June alone — more than double its original budget. 

It has also spent more than double its annual budget for diesel only halfway into the year.  

The big splurge is still not enough to avoid outages that can cause havoc, from delays at intersections with downed traffic lights to faults at substations prolonging blackouts. 

In April, the company warned the country could see as many as 101 days of load shedding this year due to breakdowns.

– Delayed renewables –

At least 10,000 MW of renewable wind and solar energy should have been brought online since 2015 to keep pace with demand, Mallinson said. 

An intensive building strategy to make that up in the next two years would relieve the issue. 

“We have to build rapidly, like our lives depend on it,” Mallinson said. 

The mining industry, the country’s economic backbone, has begun investing in self-generation with renewables, Henk Langenhoven, chief economist at the trade grouping Minerals Council South Africa, told AFP.

“As the problems… with the core energy supply from Eskom are rising and the shortfalls are increasing, the pressure and the inclination to actually move that way is actually getting stronger,” Langenhoven said.

Eskom’s senior officials have similarly made repeated calls for the swift development of new energy sources. 

But in February, Energy Minister Gwede Mantashe declared coal would remain “a mainstay” for South Africa’s electricity mix for the “foreseeable future”. 

This comes despite South Africa being promised at least $8.5 billion from rich nations at the UN climate summit last November to aid its low-carbon transition.

The country’s energy burden is only expected to grow in the coming years. 

Power demands could triple by 2040 as transportation and other industries move to electrification, Mallinson said. 

Without rapid investment, load shedding will remain a fixture.