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Brazil tourism sector tries to rise from pandemic ashes

Feb 28,2022 - Last updated at Feb 28,2022

Aerial view of the Marques de Sapucai sambadrome at the city centre of Rio de Janeiro, Brazil, on February 24 (AFP photo)

RIO DE JANEIRO — With the glittering parades, towering floats and sultry samba postponed by the omicron variant, Brazil will have a carnival week without much carnival this year — bad news for a tourism industry already battered by the pandemic.

In a world without COVID-19, this would have been the week a deluge of tourists — more than 2.1 million in 2020 — descended on Rio de Janeiro for a free-for-all of street parties and spectacular, all-night parades.

Instead, industry experts predict Rio and other tourist destinations to be relatively low-key, with a smaller number of visitors — mainly Brazilians travelling domestically.

That is adding to the agony of a tourism industry only just starting to recover from near-collapse in 2020.

"It's been very traumatic," said Alexandre Sampaio, head of hotel and restaurant federation FBHA, citing official figures showing the tourism industry's revenues plunged 35 per cent in 2020.

The industry rebounded only partially in 2021, growing around 20 per cent.

Carnival week will still have concerts, parties and balls in Rio — limited to 70 per cent capacity, with vaccine and mask requirements.

But Omicron led authorities to cancel carnival street parties for the second straight year, and postpone the famed samba school parade competition until April.

"We'll see some revenues" from the rescheduled parades, "but it won't come anywhere near pre-pandemic levels," said Fabio Bentes, an economist at the National Confederation of Trade in Goods, Services and Tourism (CNC).

Bentes predicts carnival-week revenues one-third below pre-pandemic levels.

His research indicates the tourism industry, which accounted for 7.7 per cent of Brazil's economy before the pandemic — 551.5 billion reais ($110 billion) in direct and indirect revenues in 2019 — has lost $94.1 billion in the past two years, and more than 340,000 jobs.

 

'Call of the journey' 

 

Brazil is a bucket-list destination for many people, with the Amazon rainforest, the Pantanal wetlands, the colourful colonial capital of Salvador, the stunning waterfalls of Iguacu and myriad other must-sees — not to mention Rio and carnival.

But the country has been hit hard by the pandemic, with nearly 650,000 deaths — second only to the United States.

The numbers have improved with more than 70 per cent of the population now fully vaccinated.

But visitors have been slow to return.

Flavio Miranda is waiting for business at the base of Corcovado mountain, where Rio's iconic Christ the Redeemer statue spreads his arms over the city.

Miranda, a 52-year-old driver from a nearby favela, sells tours of the city's attractions.

He spent eight months without work when the pandemic arrived, relying on food handouts to feed his family of four.

Tourists "are returning, but it's slow", he told AFP, saying his income is down about 80 per cent.

"This place used to be bursting with tourists. Now there are hardly any."

Nearby, Miguel Viana, a 27-year-old engineer on vacation from Portugal, was on his way to visit the statue.

"The call of the journey was stronger than the pandemic," he said with a laugh.

But he is among the few. International tourist numbers remain at just five to 7 per cent of pre-pandemic levels, Sampaio estimates.

Local tourism 

Experts say the drop in foreign tourists has been partially offset by more Brazilians travelling domestically, themselves wary of flying overseas.

"We used to mainly travel abroad. But we had been isolated so long, we wanted to start travelling again. So we decided to start with Brazil," said Maria Augusta Rosa, 40, a civil servant from the central city of Goiania vacationing in Rio.

Experts predict a full recovery for Brazil's tourism sector only in 2023 — if there are no more unpleasant surprises in the meantime.

In Manaus, the "capital of the Amazon", Remy Harbonnier, a French tour operator who specialises in rainforest lodges and river cruises, said client and revenue numbers at his company, Heliconia, remain around 80 per cent off pre-pandemic levels.

He hopes to cut that to 50 per cent this year, he says.

But that will depend on events.

"Now we're worried about the situation in Ukraine. It's a bit scary," he said.

"We just try to tell ourselves, we've gotten through two years of COVID, we'll get through an armed conflict in Europe."

By Joshua Howat Berger
Agence France-Presse

Lebanese turn to public libraries to check out of financial crunch

By - Feb 28,2022 - Last updated at Feb 28,2022

By Layal Abou Rahal
Agence France-Presse

BEIRUT — In many countries, public libraries are considered a dying relic amid the shift to digital, but in Lebanon they are getting a new lease of life as its economy flatlines.

Every Friday afternoon, Munira Khalifa takes her son Elia to a public library in Beirut for a weekly storytelling event — one of the last affordable pleasures as a crashing local currency has rendered books something of a luxury.

"We had reached a point where we couldn't find anywhere to take Elia because of the coronavirus pandemic and our difficult financial situation," Khalifa said.

She is just one of hundreds of parents who are hitting the shelves at three public libraries in Beirut in the heat of the unprecedented financial crisis.

The libraries are managed by the Assabil non-governmental group, which was founded in 1997 to promote free access to books and culture.

At one of them in the neighbourhood of Bachoura, the mother and son were the first to arrive ahead of a reading.

The library offered them some relief, Khalifa said, adding: "It is safe, comfortable and close to home."

"Financially, it helps us cut on costs for transportation and new books, which have become more expensive," she told AFP.

Throughout the reading, laughter abounded as a storyteller acted out a book using puppets.

Librarian Samar Choucair said the number of visitors at the facility had increased in the past year, largely since people cannot afford to buy new books.

This is especially the case for children's books, which are mostly produced abroad and tend to be more expensive, she said.

"We keep hearing from parents that this is the spot they choose to take their children... in light of the economic crisis."

'Need to read' 

Sluggish Internet speeds and the absence of credit cards have also hindered the take-up of digital books in Lebanon, where banks have locked people out of their accounts.

Lebanon is facing a financial crisis that the World Bank says is of a scale usually associated with wars, with more than 80 per cent of the population living in poverty.

The local currency has shed more than 90 per cent of its value against the dollar on the black market, causing skyrocketing inflation.

As a result, the cost of printing and buying books has soared, while the monthly minimum wage remains unchanged at 675,000 pounds, the equivalent nowadays of just $32.

While this may have translated into more footfall at libraries, it has eaten into booksellers' profits.

Lana Halabi, who runs a family-owned bookshop in Beirut's Tariq Al Jadideh neighbourhood, said all new books were priced in dollars and therefore hit by the fluctuating exchange rate.

"Book purchases are not a priority" for many Lebanese, the 33-year-old told AFP.

"This has reflected negatively on us and other publishing houses," she added, pointing to a drop in orders at the Halabi bookshop.

But in a public library in Beirut's Geitawi neighbourhood, demand is on the rise, prompting management to add 300 new covers to their collection in the past two months, said librarian Josiane Badra.

"Books have become very expensive and people can't afford them... especially novels that are in great demand in the region, whether in French or in Arabic," she said.

For literature student Aline Daou, the Geitawi public library is an indispensible lifeline.

"As a literature student, I always need to read," the 21-year-old said.

I prefer to borrow novels from here," she added, explaining that it helps her set aside money to buy books not carried by public libraries.

'Breathing room' 

Ali Sabbagh of the Assabil organisation said public libraries offered people "breathing room", but they were beset by challenges.

"We run these libraries in partnership with the Beirut municipality which used to front around 80 per cent of operating costs in Lebanese pounds," he said.

The currency devaluation, according to Sabbagh, has meant the value of municipal funding has plummeted.

"We are trying as much as possible to reach out to donors that can provide us with the necessary support to continue," Sabbagh told AFP.

"Relying solely on public funds during this time has become very difficult."

International donors, meanwhile, tend to focus on humanitarian projects as opposed to cultural spaces, said Sabbagh.

At the Geitawi library, fine arts student Valentina Habis said funding should not overlook culture.

"In the midst of economic collapse, we need cultural spaces... places that develop thought and culture, because culture is the basis of society," she said.

Stocks rebound, oil slips as traders weigh Russia sanctions

By - Feb 26,2022 - Last updated at Feb 26,2022

LONDON — Global stocks rebounded on Friday, one day after slumping as Russia invaded Ukraine, while oil declined from 2014 peaks.

In Europe, the three main indices all briefly gained over 3 per cent in afternoon trading, recovering much of the previous day's losses, as Western nations held off from imposing sanctions that would cripple critical sales of Russian oil and gas.

On Wall Street, which ended on Thursday in positive territory, the Dow rose by 0.4 per cent at the start of trading on Friday, although the tech-heavy Nasdaq Composite dipped slightly.

Asian equities mostly bounced back.

European benchmark Brent crude was down to $97.76 per barrel, having briefly soared past $105 per barrel on Thursday for the first time since 2014.

Haven investment gold firmed above $1,900 per ounce, having forged a near 1.5-year peak on Thursday.

"It's a remarkable turnaround when you consider that the invasion is still taking place and sanctions are being drawn up," said market analyst Craig Erlam at trading platform OANDA.

"With oil trading back below $100 a barrel and gas prices falling after yesterday's surge, it would appear traders are anticipating minimal disruption to Russian exports either directly as a result of the invasion or from sanctions imposed," he added.

Sanctions 'underwhelmed' 

"The latter is understandable as the proposed measures so far have underwhelmed, to say the least," said Erlam.

Western nations added to sanctions on senior Russian officials and business figures as well as Russian banks. However, they have largely spared the Russian energy sector and not cut Russia off from the SWIFT international bank transfer system.

"From our vantage point, the rally after the new sanctions were announced suggested to us that the new sanctions weren't harsh enough, as market participants seemingly took comfort in the recognition that nothing was done to restrict Russia's oil and gas exports or its access to the SWIFT financial payments system," said Patrick J. O'Hare at Briefing.com.

Such moves would have sent already high energy prices even higher, causing more pain for consumers.

"The stock market is acting as if it thinks the Russia-Ukraine situation won't become a source of hyper commodity inflation or the basis for an economically-damaging cyber war," O'Hare added.

Fuel prices raised in Sri Lanka as energy crisis worsens

By - Feb 26,2022 - Last updated at Feb 26,2022

A worker fills petrol in a scooter at a Lanka IOC fuel station in Colombo on Saturday, after one of Sri Lanka's biggest fuel suppliers put up its prices by as much as 12 per cent, as the cash-strapped island's energy crisis worsened (AFP photo)

COLOMBO — One of Sri Lanka's biggest fuel suppliers put up its prices by as much as 12 per cent on Saturday, as the cash-strapped island's energy crisis worsened.

Lanka IOC, a fuel retailer which accounts for a third of the market, said it was increasing prices for diesel — commonly used by public transport — by 12 per cent, and petrol up 11 percent.

The increases came after a 7 per cent price rise three weeks ago and will add to the upward pressure on inflation, already at a record high.

The island is in the grips of an economic crisis after the tourism sector, a key foreign-exchange earner, collapsed in the wake of the COVID-19 pandemic.

The government imposed a broad import ban in March 2020 in an effort to save foreign currency.

The country is now suffering widespread shortages, including fuel, electricity, automotive parts and cement, with supermarkets forced to ration staple foods including rice, sugar and milk powder.

The shortages pushed food inflation to 25 per cent last month with overall inflation at 16.8 per cent.

There was no immediate energy price revision by the state-run Ceylon Petroleum Corporation (CPC), but most of its pumps have been out of fuel for days.

Energy Minister Udaya Gammanpila announced this week that he expected fuel shortages to ease in "days", but warned that a sharp price increase was necessary to retain the viability of the loss-making CPC.

Gammanpila said the CPC continued to haemorrhage cash and was already carrying debts exceeding $3.5 billion. The CPC loss for last year was $450 million, he added.

"Earlier, we were short of dollars to import oil. Now we don't have the rupees to buy the dollars," Gammanpila said.

Several thermal power stations, meanwhile, have closed with the electricity utility extending daily power cuts to five-and-half-hours a day from Friday.

Three international rating agencies have downgraded the island since late last year on fears it may not be able to service its $35 billion sovereign debt.

Sri Lanka has also sought more loans from Beijing to help repay its existing Chinese debt, which accounts for about 10 per cent of the country's external borrowings.

Authorities have borrowed heavily from China for infrastructure projects in the past, some of which ended up as costly white elephants.

Lebanon to get Spanish funds for railway revival plan-- minister

By - Feb 24,2022 - Last updated at Feb 24,2022

Lebanese Minister of Public Works and Transport Ali Hamieh, speaks during an interview with AFP at his office in Fayadiyeh, on the eastern outskirts of Beirut, on Wednesday (AFP photo)


FAIYADIYEH, Lebanon — Lebanon's transport minister has said that Spain will finance a plan to revive the railway network that has been out of service since the start of the 1975-1990 civil war.

A deal for a "comprehensive master plan for the 407 kilometre-long railway" is expected next month, Public Works and Transport Minister Ali Hamie told AFP during an interview on Wednesday.

"We should sign a deal with the Spanish government within three weeks," Hamie said, adding that the plan should be completed six months after an agreement is clinched.

Lebanon had a railway network since the end of the 19th century which connected Beirut to the Syrian capital Damascus.

It was built during Ottoman rule and inaugurated in 1895, operating until the devastating civil war begun 47 years ago.

Several proposals to revamp the network -- and public transport in general -- were made after the end of the war in 1975 but were shelved.

The network, like most of Lebanon's post-war infrastructure, fell into disrepair, and illegal construction sprouted along the railway.

With public transport effectively non-existent, there are more than 2 million cars for 6 million people in Lebanon.

In 2018, the World Bank approved a $295 million package to jumpstart the country's first modern public transport system.

But that too was put on hold as Lebanon has been struggling since 2019 with a major financial crisis dubbed by the World Bank as one of the planet's worst in modern times.

Spain's government will pay a Spanish firm to draft a feasibility study, a survey of current infrastructure and proposals to settle infringements on the rail network, Hamie said.

The master plan, he said, could serve as a way to attract potential investors for the rehabilitation of the railway.

Lebanon's cash-strapped public works ministry is trying to attract funds in foreign currency by launching tenders for top facilities.

They include the Beirut International Airport and the Beirut Port, where an explosion caused by a huge stockpile of ammonium nitrate fertiliser in August 2020 killed more than 200 people and destroyed swathes of the capital.

Next week, Hamie is due to sign a 10-year contract with French shipping giant CMA CGM to run the container terminal at Beirut port.

The Lebanese government in partnership with the World Bank is also working on drafting a roadmap for the reconstruction of the port which should be ready by August, Hamie said.

"The master plan for the port lays out a framework for optimal investment" before the start of reconstruction which is estimated to cost $500-600 million, the minister told AFP.

Barclays freezes ex-boss bonuses over Epstein probe

By - Feb 23,2022 - Last updated at Feb 23,2022

Profits surged at Barclays thanks to the economy recovering from the COVID-19 crisis (AFP photo)

LONDON — British bank Barclays on Wednesday suspended £22 million of bonuses owed to ex-boss Jes Staley amid a probe into his links with US sex offender Jeffrey Epstein.

Barclays has frozen its former chief executive's unvested long-term bonus share awards — worth $30 million or 26 million euros — while he remains the subject of a regulatory investigation, the group said as it posted surging annual profits.

The bank said its nominations committee made the decision "pending further developments in respect of the regulatory and legal proceedings related to the ongoing investigation regarding Mr Staley".

The former boss, who stepped down last year, was nevertheless entitled to a contractual entitlement of £2.4 million in cash and shares — equivalent of 12 months' salary — as well as pension and other benefits.

Staley resigned in November ahead of contesting the outcome of the UK investigation into his historical relationship with Epstein, the American financier who killed himself in 2019 while awaiting trial on charges of trafficking underage girls for sex.

Staley quit after UK regulators informed the Barclays board of the preliminary conclusions of an ongoing probe.

The bank has stressed that watchdogs have made no findings that Staley saw or was aware of Epstein's crimes.

Staley for his part has expressed deep regret at having had a professional relationship with Epstein prior to becoming Barclays head in late 2015.

Epstein continues to cause huge fallout elsewhere, with Queen Elizabeth II's second son Prince Andrew this month settling a sexual assault lawsuit for an undisclosed sum with a woman who says she was "lent out" for underage sex by the late financier.

The prince has not been criminally charged and has denied the allegations.

 

Profits surge 

 

Barclays on Wednesday also revealed that it had beefed up its staff bonus pool after 2021 net profits more than quadrupled as the economy recovered from coronavirus fallout.

Profit after tax surged to almost £6.4 billion, helped by the release of £700 million that had been set aside for bad loans during the pandemic.

That compared with a £1.5 billion profit the prior year, when Barclays had taken a £4.8 billion charge to cover COVID-19 fallout.

The bank ramped up its total bonus pool by almost a quarter to more than £1.9 billion, becoming the latest UK lender to shrug off Britain's cost of living crisis with dizzying staff incentives.

Addressing MPs on the state of the economy, Bank of England governor Andrew Bailey on Wednesday asked retail banking giants to reflect on the current high-cost of living situation for the bulk of Britons when handing out big bonuses.

Bailey sought also to downplay his recent comments that British workers should be careful about asking for wage increases with inflation at the highest level in decades.

"I'm not saying people should not take pay rises. It was in the context of large pay rises," he told the cross-party panel of lawmakers.

"If everybody tries to get ahead of the shock that we've had from outside, we'll get the second round effects and it will get worse, that's the problem."

On executive pay and bonuses in reaction to a question from Angela Eagle, an MP from the main opposition Labour Party, Bailey told the Treasury Committee:

"When you're thinking about it, please reflect on the economic situation we're in with this very big economic shock coming in from outside."

Barclays, like the banking sector in general, says big bonuses are required to avoid losing talent to rivals.

On Wednesday it said the 2021 profits performance was "driven by an improved macroeconomic outlook" and buoyed also by reduced unsecured lending balances and a benign credit environment.

 

Leadership after Staley 

 

"Barclays demonstrated a clear and sustainable path to growth over the course of 2021," said chief executive C.S. Venkatakrishnan.

The annual results are the first under Venkatakrishnan, who was promoted from his role as head of global markets following Staley's sudden departure.

Barclays on Wednesday named Anna Cross as its new finance director with effect from April.

The deputy finance director was the first woman to take the top finance job at the lender.

 

UAE invests in drones, robots as unmanned warfare takes off

By - Feb 22,2022 - Last updated at Feb 22,2022

Visitors view a MQ-9B Sea Guardian Drone by General Atomics Auronautical on display at the UMEX Exhibition showcasing drones, robotics, and unmanned sytems at the Abu Dhabi National Exhibition Centre in the gulf emirate, on Tuesday (AFP photo)

ABU DHABI — The United Arab Emirates is ploughing money into drones, robots and other unmanned weaponry as autonomous warfare becomes more and more widespread — including in attacks on the Gulf country by Yemeni rebels.

Large, black drones with the orange logo of EDGE, the UAE's arms consortium, were on display at this week's Unmanned Systems Exhibition (UMEX), along with remote-controlled machineguns and other "smart" weapons.

The exhibition comes at a time of growing unmanned attacks around the region, including the January 17 drone-and-missile assault by Yemen rebels that killed three oil workers in Abu Dhabi, the first in a series of similar incidents.

"Autonomous systems are becoming ever more prevalent around the world," Miles Chambers, EDGE's director of international business development, told AFP.

"We are really heavily investing in developing our autonomous capability... as well as in electronic warfare and in our smart munitions. These are our three pillars."

EDGE, an Abu Dhabi-based defence consortium that groups 25 Emirati firms, was formed three years ago but reached an estimated $4.8 billion in arms sales in 2020 — nearly all of them to the UAE government.

The group was ranked 23rd among the 100 top arms-producing and military services around the globe in 2020, according to the Stockholm International Peace Research Institute.

The UAE is part of the Saudi-led coalition that has been fighting Yemen's Houthi rebels since 2015. Although it withdrew ground troops in 2019, it remains a key player in the grinding conflict.

EDGE's most lucrative deals have included maintenance of military jets, worth almost $4 billion, as well as providing guided munitions at $880 million.

On Tuesday, it unveiled a vehicle-mounted remote-controlled assault rifle that can swivel 360 degrees and has thermal imaging and a laser range finder accurate to 50 centimetres for targets more than two kilometres  away.

EDGE was looking at "expanding our international footprint" in 2022, said Chambers.

 

'Step up' 

 

The use of drones and other unmanned weapons is increasingly common.

Last year the United States and Israel said an Iranian drone attacked a ship managed by an Israeli billionaire as it sailed off Oman. Two crew were killed.

In November, Iraq's prime minister survived an attack by a bomb-laden drone, and according to reports, Israel's 2020 assassination of a top Iranian nuclear scientist was carried out using a remote-controlled machinegun mounted on a pick-up truck.

Drones are also favoured by Yemen's Houthis.

In December, the coalition said the insurgents had fired more than 850 attack drones and 400 ballistic missiles at Saudi Arabia in the past seven years, killing 59 civilians.

That compares with the 401 coalition air raids carried out in January alone over Yemen, according to the Yemen Data Project, an independent tracker which reported around 9,000 civilian deaths from the strikes since 2015.

Ahmed Al Mazrouei, owner of an Emirati company that mainly develops four-wheel drive vehicles and personnel carriers, said the UAE defence industry was ready to "step up" following the attacks on Abu Dhabi.

"The challenges are important because they push us to develop ourselves in order to meet those challenges," he said.

"Our goal is to have more systems and more tech" in the next 10 years, Mazrouei added. "This is an Emirati-made production... and we want to compete globally."

EDGE has signed multiple deals with foreign partners, including US firms Lockheed Martin and Raytheon, and Brazil's Embraer, Khalid Al Breiki, who heads one of EDGE's five clusters, told AFP at last year's Dubai Airshow.

The establishment of diplomatic relations with Israel in 2020 has also opened up new opportunities.

The fifth edition of UMEX is the first to include Israel, one of seven newcomers among the 26 countries taking part.

On Monday, the UAE defence ministry signed three deals with domestic and international companies with a total value of more than 654.6 million dirhams ($178.2 million), including a 10 million dirhams sale of drone systems to UAE-based International Golden Group.

Iran president makes maiden Gulf trip for gas, nuclear talks

By - Feb 21,2022 - Last updated at Feb 21,2022

DOHA — Iran's President Ebrahim Raisi arrived in Qatar on his first visit to a Gulf Arab state on Monday for a major gas summit.

Raisi and Qatar's Emir, Sheikh Tamim Bin Hamad Al Thani, a close US ally, are also expected to discuss growing efforts to revive a stalled international deal to regulate Iran's nuclear programme.

Tuesday's Gas Exporting Countries Forum will be overshadowed by growing tensions around Ukraine which have boosted demand for gas as well as the price paid by consumers.

Producing nations say they will not be able to provide substantial amounts of gas to Europe if Russia, which has been accused of preparing an attack on Ukraine, cuts supplies in any sanctions showdown.

Raisi has not travelled in the Gulf region since taking office in June, and it is only his fourth trip abroad. Qatar authorities imposed stringent security for his arrival at Doha airport, where he was met by the emir.

Qatar has added the Iran nuclear dispute to its list of diplomatic hotspots where it has taken a behind-the-scenes mediation role. 

Earlier this month Qatari Foreign Minister Sheikh Mohammed Bin Abdulrahman Al-Thani went on an unannounced visit to Tehran after the emir met US President Joe Biden in Washington. 

Stocks retreat as Russia downplays hopes of Biden-Putin summit

By - Feb 21,2022 - Last updated at Feb 21,2022

LONDON — Stock markets mostly fell on Monday as the Kremlin warned there were no firm plans for a summit between US President Joe Biden and Russian counterpart Vladimir Putin to avert a possible Moscow invasion of Ukraine.

Warnings from US officials that Russia could invade its neighbour imminently sent markets spiralling last week and briefly sent crude surging towards $100 per barrel as traders fret over already tight supplies.

The Ukraine crisis has compounded worries about decades-high inflation that is causing central banks to hike interest rates.

Asian and European equity markets mostly retreated on Monday, though London managed to edge higher on hopes for the UK economy as Prime Minister Boris Johnson was set to announce an end to all pandemic legal curbs in England.

French flag-carrier Air France said it was cancelling its flights to and from Kyiv scheduled on Tuesday over security concerns sparked by the Russian troop build-up on Ukraine's border.

Air France, which runs return Paris to Kyiv flights also on Sundays said the move was a "precautionary measure".

The United States is "committed to pursuing diplomacy until the moment an invasion begins", Biden's press secretary Jen Psaki said. 

With Russia a key exporter of crude, all eyes are on oil prices, which steadied on Monday.

"A proposed summit does offer some relief to the market, as it suggests that both sides are still possibly open to dialogue," said Warren Patterson at ING Groep NV.

"Asset prices, particularly commodities, will continue to be heavily influenced by Russia-Ukraine noise."

Observers are warning that oil at $100 per barrel could soon be breached and could hold above that level for an extended period, even if talks on Iran's nuclear programme succeed and lead to the resumption of Tehran's crude exports.

The sharp rise in crude is a key driver of inflation across the planet, adding to supply chain snarls and bottlenecks.

While expectations are for a Fed rate hike next month, some bank officials at the weekend indicated they were not in favour of a 50 basis point rise, as has been suggested in light of soaring consumer prices.

The prospect of higher borrowing costs this year has weighed on markets for months, bringing a near two-year equity rally to an end with commentators predicting further volatility.

Kuwait Airways raises Airbus order to 31 jets in $6b deal

By - Feb 21,2022 - Last updated at Feb 21,2022

This photo shows the Chairman of Kuwait Airways Ali Al Dakhnan (centre-left ) shaking hands with Mikail Houari, president of Airbus Africa and Middle East, after signing a deal at the Kuwait airways headquarters on Monday (AFP photo)

KUWAIT CITY — Kuwait Airways announced on Monday an expanded $6 billion deal with Airbus for 31 aircraft, restructuring an agreement reached in 2014. 

The deal comes after what the airline labelled occasionally "heated" negotiations following probes over allegations of kickbacks surrounding the initial order.

"We have managed to agree on a monumental restructuring that will position Kuwait Airways in a much stronger place to succeed for the next 15 years," the company Chairman Ali Al Dukhan told a news conference.

The new agreement, which adds three new aircraft to the existing order of 28, includes nine Airbus A320neo, six A321neo, three A321neoLR, four A330-800neo, seven A330-900neo and two A350-900.

Al Dukhan said the reshaped deal, aimed at giving the airline greater flexibility after the travel industry was rocked by the coronavirus pandemic, now carried a "total value of about $6 billion".

"Although corrections were made in 2018, the deal needed further corrections to suit Kuwait Airways' future, especially with the need to transition and become more flexible in a post-COVID aviation industry," he said.

Negotiations took place against the backdrop of bribery allegations that cost Airbus billions of dollars in settlement fees in other countries in 2020.

Record profits 

"As we initiated the negotiations, we knew we were already the underdogs going in as 40 per cent of the deal's value had already been paid and the delivery had started," Al Dukhan said.

He added: "We entered four months of serious, professional negotiations, which did get heated at times, but always maintained respect and understanding of each other's wants and needs."

Kuwait Airways had initially ordered 15 Airbus A320neo and 10 A350 in 2014, with delivery beginning in 2019.

In February 2020, Kuwait's parliament opened a fact-finding panel to probe allegations of kickbacks, after Airbus paid huge fines to settle bribery cases in French, British and American courts.

Under the settlement, Airbus agreed to pay 3.6 billion euros ($4.1 billion) in fines to settle corruption probes into some of its aircraft sales.

Last week, the European giant announced record profits of 4.2 billion euros ($4.8 billion) in 2021, after two straight years of losses during the pandemic.

Deliveries of aircraft rose 8 per cent to 611 aircraft, Airbus said in an earnings statement.

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