New Covid-19 variant Omicron disrupts holiday travel but not shopping

The latest COVID-19 variant is upending holiday plans for tens of thousands of travellers, but it didn't do much damage to holiday shopping.

Airlines cancelled hundreds more flights on Sunday, citing staffing problems tied to COVID-19, as the nation's travel woes extended beyond Christmas, with no clear indication when normal schedules would resume.

But shoppers shrugged off the omicron variant, and holiday sales rose at the fastest pace in 17 years, according to one spending measure.

Omicron is likely to slow the economy's unexpectedly strong rebound from last year's coronavirus recession, disrupting travel and likely discouraging some consumers from venturing out to shops, restaurants and bars. The variant could also add more heat to already simmering inflation by forcing shutdowns of factories and ports, delaying shipments and driving up prices.

"A full reopening of the US economy will be delayed yet again,'' said Robin Brooks, chief economist at the Institute of International Finance, a trade group of financial firms.

But it's not yet clear how deep the hurt will go or how long it will last.

For now, the variant is playing havoc with travel. More than 700 flights entering, leaving or flying within the U.S. were called off, according to the flight-tracking website FlightAware. That figure was down from nearly 1,000 on Saturday. More than 50 flights were already canceled for Monday.

Delta, United and JetBlue have blamed the omicron variant of the coronavirus for staffing shortages that forced cancellations.

"This was unexpected, United spokesperson Maddie King said of omicron's impact on staffing.

Globally, airlines scrapped about 2,200 flights as of Sunday morning, down from more than 2,800 cancellations the day before, FlightAware's data showed. The site does not say why flights are cancelled.

JetBlue scrapped 10 per cent of its flights on Sunday. Delta cancelled five per cent and United cancelled four per cent, according to FlightAware. The three airlines cancelled more than 10 per cent of their scheduled flights on Saturday.

American Airlines spokesperson Derek Walls said the Christmas cancellations stemmed from virus-related sick calls.

Despite omicron, American consumers appeared undaunted. Mastercard Spending Pulse, which tracks all kinds of payments, including cash and debit cards, reported on Sunday that holiday sales had risen 8.5 per cent from a year earlier, the biggest annual gain in 17 years. Mastercard SpendingPulse had expected a 7.4 per cent increase.

The results, which covered November 1 through December 24, were fuelled by purchases of clothing and jewellery. Holiday sales were up 10.7 per cent compared with the pre-pandemic 2019 holiday period.

After omicron hit, some consumers shifted their spending to e-commerce, but sales stayed strong.

"I feel really good about how the season played out," said Steve Sadove, senior adviser to Mastercard and former CEO of Saks Inc.

"When people feel a little bit uncomfortable, you'll see a little bit of a pickup in online and a little bit of a slowdown in store performance."

Sadove said consumers are learning to live'' with what COVID-19 throws at them.

"You're coming out of 2021 with quite a bit of consumer momentum,'' he said.

Also Sunday, the nation's top infectious disease doctor acknowledged that he was frustrated with the limited supply of COVID-19 tests.

Demand for tests has risen amid the surge fueled by the omicron variant.

"We've obviously got to do better," Dr. Anthony Fauci said an interview that aired Sunday on ABC's This Week".

"I think things will improve greatly as we get into January, but that doesn't help us today and tomorrow, Fauci said.

Fauci said he was pleased with evidence that omicron causes less severe illness for most people. But he warned against complacency because the rapid spread of the disease could override a real diminution in severity, because so many more people could get infected.

There are still many questions about how bad the omicron variant surge will be in the US, Johns Hopkins infectious disease specialist Dr Amesh Adalja said on Sunday.

"There are multiple signals showing decreased severity. But the problem is, we have many high-risk individuals that are not vaccinated in some parts of the country. And there are hospitals in those regions that already are dealing with a lot of delta patients," Adalja said.

Meanwhile in Europe, France recorded more than 100,000 virus infections in a single day for the first time in the pandemic. COVID-19 hospitalizations have doubled over the past month as omicron complicates the French government's efforts to stave off a new lockdown.

More than 1 in 100 people in the Paris region have tested positive in the past week, according to the regional health service. Most new infections are linked to omicron, which government experts predict will be dominant in France in the coming days. Omicron is already dominant in Britain, right across the English Channel.

France's overall death toll stands at more than 122,000.

President Emmanuel Macron's government planned emergency meetings for Monday to discuss the next steps. Some scientists and educators have urged delaying the post-holiday return to school or suggested re-imposing a curfew.