COVID-19 variant disrupts holiday travel but not shopping

NEWARK, N.J. (AP) — 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 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 by disrupting travel and discouraging some consumers from venturing out.

The variant could also add more heat to already simmering inflation by forcing shutdowns at 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 US 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 cancelled for Monday.

Delta, United, JetBlue and American have blamed omicron for staffing shortages that forced cancellations.

“This was unexpected,” United spokesperson Maddie King said of the variant's effect 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 were cancelled.

JetBlue scrapped 10% of its flights Sunday.

Delta cancelled 5% and United cancelled 4%, according to FlightAware. The three airlines cancelled more than 10% of their scheduled flights on Saturday.

Despite omicron, American consumers appeared undaunted. Mastercard SpendingPulse, which tracks all kinds of payments, including cash and debit cards, reported Sunday that holiday sales had risen 8.5% from a year earlier, the biggest annual gain in 17 years. Mastercard SpendingPulse had expected an 8.8% increase.

The results, which covered November 1 through December 24, were fuelled by purchases of clothing and jewellery. Holiday sales were up 10.7% 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 omicron surge. “We've obviously got to do better,” Dr Anthony Fauci said in an interview that aired Sunday on ABC's “This Week.”

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