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More than 3,000 flights were canceled around the world on Sunday, more than half of them U.S. flights, adding to the toll of holiday week travel disruptions due to adverse weather and the surge in coronavirus cases caused by the omicron variant. 

Over 3,300 flights had been canceled by noon GMT on Sunday, including over 1,900 entering, departing from or within the United States, according to a running tally on the tracking website FlightAware.com. Including those delayed but not canceled, more than 4,800 flights were delayed in total. 

The Christmas and New Year holidays are typically a peak time for air travel, but the rapid spread of the highly transmissible omicron variant has led to a sharp increase in COVID-19 infections, forcing airlines to cancel flights as pilots and crew quarantine. 

Transportation agencies across the United States were also suspending or reducing services due to coronavirus-related staff shortages. 

Omicron has brought record case counts and dampened New Year festivities around much of the world. 

The rise in U.S. COVID-19 cases had caused some companies to change plans to increase the number of employees working from their offices Monday. 

Chevron Corp was to start a full return to office from Jan. 3 but told employees in late December it was postponing the move indefinitely. 

U.S. authorities registered at least 346,869 new coronavirus cases on Saturday, according to a Reuters tally. The U.S. death toll from COVID-19 rose by at least 377 to 828,562. 

U.S. airline cabin crew, pilots and support staff were reluctant to work overtime during the holiday travel season, despite offers of hefty financial incentives. Many workers feared contracting COVID-19 and did not welcome the prospect of dealing with unruly passengers, some airline unions said. 

In the months preceding the holidays, airlines were wooing employees to ensure solid staffing, after furloughing or laying off thousands over the last 18 months as the pandemic hobbled the industry. 
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The United States on Saturday cut Ethiopia, Mali and Guinea from access to a duty-free trade program, following through on President Joe Biden’s threat to do so over accusations of human rights violations and recent coups.

“The United States today terminated Ethiopia, Mali and Guinea from the AGOA trade preference program due to actions taken by each of their governments in violation of the AGOA Statute,” the U.S. Trade Representative’s office said in a statement.

Biden said in November that Ethiopia would be cut off from the duty-free trading regime provided under the U.S. African Growth and Opportunity Act (AGOA) because of alleged human rights violations in the Tigray region, while Mali and Guinea were targeted because of recent coups.

The suspension of benefits threatens Ethiopia’s textile industry, which supplies global fashion brands, and the country’s nascent hopes of becoming a light manufacturing hub. It also piles more pressure on an economy reeling from the conflict, the coronavirus pandemic, and high inflation.

“The Biden-Harris administration is deeply concerned by the unconstitutional change in governments in both Guinea and Mali, and by the gross violations of internationally recognized human rights being perpetrated by the government of Ethiopia and other parties amid the widening conflict in northern Ethiopia,” the trade office statement said.

The AGOA trade legislation provides sub-Saharan African nations with duty-free access to the United States if they meet certain eligibility requirements, such as eliminating barriers to U.S. trade and investment and making progress toward political pluralism.

“Each country has clear benchmarks for a pathway toward reinstatement and the administration will work with their governments to achieve that objective,” it added.

The Washington embassies of the three African countries did not immediately respond to requests for comment.

Ethiopia’s Trade Ministry said in November it was “extremely disappointed” by Washington’s announcement, saying the move would reverse economic gains and unfairly impact and harm women and children.
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Tesla has recalled 675,000 cars in the United States and China over issues with the trunk and front hood of two models, raising new questions about the safety of the popular electric vehicle. 

Chinese regulators announced the recall of almost 200,000 cars on Friday, hours after some 475,000 Tesla vehicles were flagged in the United States. 

The problems with the trunk and hood increase the risk of crashes, according to U.S. and Chinese regulators. 

Authorities said the repeated opening and closing of the trunk of the Model 3 can damage a cable for the rearview camera. 

An issue with the latch assembly for the front hood of the Model S could cause it to open without warning and obstruct the driver’s visibility, according to the U.S. National Highway Traffic Safety Administration (NHTSA). 

Tesla estimates that the problems affect 1% of Model 3 and 14% of Model S vehicles recalled in the United States, without causing any accidents so far. 

Mass recalls are not rare in the auto industry.

Volkswagen had to take 8.5 million cars out of circulation in 2015 due to the Dieselgate scandal, in which the German company admitted tampering with millions of diesel vehicles to dupe emissions tests. 

At least 100 million vehicles were recalled by car companies across the world in recent years due to a defect with airbags made by bankrupt Japanese group Takata. 

Tesla’s recall represents a quarter of the number of cars Elon Musk’s young company has produced so far. 

“It is a reality wake-up call for Tesla though, with a slap-in-the-face welcome to the automotive world that is perhaps more complex than the smartphone industry that many like to compare it to,” said German auto analyst Matthias Schmidt. 

“After all, a dysfunctional car on four wheels can do a lot more potential damage than a dysfunctional iPhone,” Schmidt said. 

Other incidents 

In June, Tesla recalled more than 285,000 cars in China over issues with its assisted driving software that could cause accidents. 

The company also recalled thousands of Model 3 and Model Y vehicles earlier that month to inspect brake calipers for loose bolts. 

In November, the NHTSA recalled nearly 12,000 Tesla cars due to errors with their communication software. 

U.S. safety officials are also investigating Tesla’s Autopilot after identifying 11 crashes involving the driver assistance system. 

The previous month, U.S. highway safety regulators demanded details from Tesla on issues with its new autonomous system, building on a previously announced probe. 

Tesla executives have downplayed the regulatory inquiries, saying they were to be expected with “cutting edge” technology and that they were cooperating “as much as possible.” 

Banner year 

The issues have been blights to an otherwise banner year for Tesla, as it joined the exclusive club of companies with a market capitalization of $1 trillion. 

The company delivered a record 240,000 vehicles in the third quarter, and Tesla’s billionaire chief Elon Musk was named Time magazine’s person of the year. 

Tesla’s good fortune contrasted with other, traditional automakers that were heavily affected by the coronavirus pandemic and a shortage of semiconductors that are key components in cars. 

Trip Chowdhry, analyst at Global Equities Research consultancy, said the latest Tesla recall is a “non-event” as the company still holds a big advantage over its competitors. 

 
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More canceled flights frustrated air travelers on the final day of 2021 and appeared all but certain to inconvenience hundreds of thousands more over the New Year’s holiday weekend. 

Airlines blamed many of the cancellations on crew shortages related to the spike in COVID-19 infections, along with wintry weather in parts of the United States. 

United Airlines, which suffered the most cancellations among the biggest U.S. carriers, agreed to pay pilot bonuses to fix a staffing shortage.

By early evening Friday on the East Coast, airlines had scrubbed more than 1,550 U.S. flights — about 6% of all scheduled flights — and roughly 3,500 worldwide, according to tracking service FlightAware.

That pushed the total U.S. cancellations since Christmas Eve to more than 10,000 and topped the previous single-day peak this holiday season, which was 1,520 on December 26. 

The disruptions come just as travel numbers climb higher going into the New Year’s holiday weekend. Since December 16, more than 2 million travelers a day on average have passed through U.S. airport security checkpoints, an increase of nearly 100,000 a day since November and nearly double last December. 

Led by Southwest and United, airlines have already canceled 1,500 U.S. flights on Saturday — about 700 at Chicago’s O’Hare Airport, where the forecast called for a winter storm — and 700 more on Sunday. 

Canceled flights began rising from a couple hundred a day shortly before Christmas, most notably for United Airlines, Delta Air Lines and JetBlue Airways. 

On Friday, United canceled more than 200 flights, or 11% of its schedule — and that did not include cancellations on the United Express regional affiliate. CommutAir, which operates many United Express flights, scrubbed one-third of its schedule, according to FlightAware. 

United decided to spend more money to fill empty cockpits. The airline reached a deal with the pilots’ union to pay 3.5 times normal wages to pilots who pick up extra trips through Monday and triple pay for flights between Tuesday and January 29, according to a memo from Bryan Quigley, United’s senior vice president for flight operations. 

JetBlue canceled more than 140 flights, or 14% of its schedule, and Delta grounded more than 100, or 5% of its flights by midday Friday. Allegiant, Alaska, Spirit and regional carriers SkyWest and Mesa all scrubbed at least 9% of their flights. 

FlightAware reported fewer cancellations at Southwest, 3%, and American, 2%. 

The virus is also hitting more federal air traffic controllers. The Federal Aviation Administration said that more of its employees have tested positive – it didn’t provide numbers Friday – which could lead controllers to reduce flight volumes and “might result in delays during busy periods.” 

While leisure travel within the U.S. has returned to roughly pre-pandemic levels, international travel remains depressed, and the government is giving travelers new cause to reconsider trips abroad. On Thursday, the State Department warned Americans that if they test positive for coronavirus while in a foreign country it could mean a costly quarantine until they test negative.

Since March 2020, U.S. airlines have received $54 billion in federal relief to keep employees on the payroll through the pandemic. Congress barred the airlines from furloughing workers but allowed them to offer incentives to quit or take long leaves of absence – and many did. The airlines have about 9% fewer workers than they had two years ago. 

Kurt Ebenhoch, a former airline spokesman and later a travel-consumer advocate, said airlines added flights aggressively, cut staff too thinly, and overestimated the number of employees who would return to work after leaves of absence. It was all done, he said, “in the pursuit of profit … and their customers paid for it, big time.” 

Many airlines are now rushing to hire pilots, flight attendants and other workers. In the meantime, some are trimming schedules that they can no longer operate. Southwest did that before the holidays, JetBlue is cutting flights until mid-January, and Hong Kong’s Cathay Pacific is suspending cargo flights and reducing passenger flights because it doesn’t have enough pilots. 

Other forms of transportation are also being hammered by the surge in virus cases. The U.S. Centers for Disease Control and Prevention said Thursday that it is monitoring more than 90 cruise ships because of COVID-19 outbreaks. The health agency warned people not to go on cruises, even if they are fully vaccinated against the virus. 

The remnants of the delta variant and the rise of the new omicron variant pushed the seven-day rolling average of new daily COVID-19 cases in the U.S. above 350,000, nearly triple the rate of just two weeks ago, according to figures from Johns Hopkins University. 

 
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Applications for state unemployment benefits fell by 8,000 from 206,000 applications last report to 198,000 for the week ending December 25, the U.S. Labor Department reported Thursday.

Economists had predicted 205,000 applications.

The number of applications was near a 50-year low, but concerns over COVID-19, low labor market participation rates and rising inflation continue to add to economic uncertainty.

Labor participation, the number of people working or actively seeking a job, continues to hover at rates not seen since the early 1970s

“The claims data may be more volatile in the upcoming weeks due to the seasonal adjustment process, but looking past that noise, we expect claims to remain around 200,000 as layoffs remain low amid tight labor market conditions,” said Nancy Vanden Houten, lead economist at Oxford Economics, according to CBS News.

Continuing claims reportedly were 1.72 million for the week ending December 18, which is the lowest since March of 2020, when the pandemic began to peak.

n October, the U.S. had nearly 11 million job openings, a near record.

The news sent the stock market slightly higher on low, pre-holiday volume.
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The U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record ahead of the second straight COVID-19-distorted holiday shopping season along with industrial supplies, while exports slipped after a historic gain a month earlier.

The goods trade gap reported Wednesday by the Commerce Department is likely to remain historically high as long as the coronavirus pandemic continues, economists said. The emergence of the fast-spreading omicron variant of COVID-19 that has driven U.S. and global caseloads to a record this week may exacerbate it further in the near term if it limits American consumers’ spending on services and restokes demand for imported goods.

Omicron also stands as a downside risk in the housing market. A reading of pending home sales also out Wednesday showed an unexpected drop in November, and while that data largely predated omicron’s ascendance in the United States, the highly contagious new variant could further limit home sales in the near term, the National Association of Realtors (NAR) said.

The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, Census Bureau data showed. That exceeds the previous record deficit set in September of $97 billion and may damp optimism that trade might finally add to U.S. economic growth this quarter for the first time in more than a year.

Imports rose by 4.7% with industrial supplies leading the way with an increase of $5.7 billion to $63.2 billion, followed by consumer goods rising by $2.9 billion to just shy of $67 billion as retailers rushed to fill store shelves ahead of Christmas. Both were record highs.

“The emergence of the omicron variant may further ignite demand for imported goods if services activity is restricted” in the first quarter of 2022, Nancy Vanden Houten, lead economist at Oxford Economics, wrote after Wednesday’s report.

Goods exports, meanwhile, declined 2.1%, with weakness across the board outside of a 4.3% increase in food exports. The drop was led by declines of $1.4 billion in industrial supplies and $1.3 billion in capital goods.

The worldwide surge of coronoavirus cases to a record in recent days – including a record U.S. caseload – may weigh on global demand in the months ahead, risking an even wider trade gap, Vanden Houten said.

The so-called Advance Indicators report also showed wholesale inventories climbed 1.2% last month, while retail inventories increased 2.0%. Retail inventories, excluding autos, which go into the calculation of gross domestic product, edged up by 1.3% to $465.2 billion, the latest in a string of record-high readings.

The economy grew at a 2.3% annualized rate in the third quarter, a step-down from earlier in the year, but activity has rebounded in the fourth quarter with a consensus among economists building around a growth rate of 6% to 7% in the final three months of 2021.

Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.

Earlier this month, the Commerce Department reported a sharp reduction in the overall trade deficit – including services – for October, which had generated some optimism that trade may contribute to the improvement in output in the final quarter of the year. The big reversal to a record goods trade gap in November may prompt a rethinking of that.

Economists at Action Economics have dialed back their fourth-quarter GDP growth estimate to 6.5% from 7.0%, with exports now seen subtracting from growth rather than adding to it as had been previously expected. Economists at JPMorgan and Goldman Sachs, meanwhile, left their estimates intact at 7%.

Meanwhile, contracts to buy U.S. previously owned homes fell unexpectedly in November as limited housing stock and lofty prices crimped activity, and the explosion of new coronavirus cases poses a risk to the housing market headed into 2022.

NAR said its Pending Home Sales Index, based on signed contracts, fell 2.2% last month to 122.4. Pending home sales were lower in all four regions.

Economists polled by Reuters had forecast contracts, which typically become final sales after a month or two, would rise 0.5% in November.

“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR’s chief economist.

Looking ahead, Yun said Omicron poses a risk to the housing market’s performance, as buyers and sellers are sidelined, and home construction is delayed.
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The Dow and S&P 500 closed at all-time highs on Wednesday on a boost from retailers including Walgreens and Nike as investors shrugged off concerns on the spreading omicron variant. 

The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5-15 this year. 

Walgreens Boots Alliance and Nike rose 1.59% and 1.42% respectively against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers. 

Data on Wednesday showed the U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record and the coronavirus pandemic has limited spending by Americans on services. 

Some early studies pointing to a reduced risk of hospitalization in omicron cases have eased some investors’ concerns over the travel disruptions and powered the S&P 500 to record highs this week. 

Meanwhile, the S&P 1500 airlines index dipped. Delta Air Lines and Alaska Air Group canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged. 

Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, in a phenomenon known as the “Santa Claus Rally.” Market participants, however, warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers, which can cause exaggerated price action. 

The Dow Jones Industrial Average rose 90.42 points, or 0.25%, to 36,488.63, the S&P 500 gained 6.71 points, or 0.14%, to 4,793.06 and the Nasdaq Composite dropped 15.51 points, or 0.1%, to 15,766.22. 

As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999. 

The focus next year will shift to the U.S. Federal Reserve’s path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound. 

Volume on U.S. exchanges was 7.89 billion shares, compared with the 11.15 billion average for the full session over the past 20 trading days. 

 
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Rights groups in Kenya are pushing authorities to resettle tens of thousands of squatters evicted just ahead of the holidays to make way for a Chinese-backed expressway.  

Kenyan Lucy Wangare, in her forties, cleans a makeshift tent that has provided her family flimsy shelter since October, when Nairobi city authorities evicted them from their home of almost two decades.

She, her husband, and her sister spent the holiday season living in the tent, enduring cold and wet nights. 

City authorities evicted more than 40,000 squatters like Wangare from the Mukuru Kwa Njenga slum and razed their homes to make way for construction of the Nairobi Expressway.  

What is left of the Mukuru slum looks like a wasteland, with scores of makeshift tents forming a small island.  

Authorities gave them just days’ notice to vacate their homes, says Wangare.

“If you look at where I sleep, you’d think I wasn’t a Kenyan citizen, you’d think I was a refugee, said Wangare. 

They used to have property and houses but, right now, they’ve been left destitute. She blames Kenya’s government.

The half a billion dollars elevated expressway aims to ease Nairobi’s notorious traffic by connecting the main international airport to the city center and wealthy suburbs.      

The Chinese state-owned China Road and Bridge Corporation is building and financing the expressway, which should be working in 2022, and will collect the tolls for nearly three decades.    

Despite critics calling it a road for the rich, Kenya’s President Uhuru Kenyatta defended the project while taking a tour of it the day before Christmas.  

“The difference that is being occasioned by the road building, the drainage being build, by the sewage being put in — I do believe that within another two years, Nairobi will be a truly 21st century city, catering for its population in a positive manner and in a manner befitting our people,” said Kenyatta.    

But Kenyan rights activists fault the government for not striking a balance between the need for infrastructure and human dignity for those evicted.  

Anami Daudi, 25, is with the Mukuru Community Justice Center.

“It’s so traumatizing, people are having mental issues here, we have other special challenges, they should get like special attention.  But you find out that even the facilities we have around they can’t even accommodate to create maybe that space to provide such services,” he said. 

The single squatters left homeless, like 38-year-old Pauline Gathoni, struggle with security fears.      

“It’s very dangerous to spend the night here, especially for us, women,” she said. The men can defend themselves if attacked,  but she can’t fight anybody. ”If someone attacks me and steals my property, tells me to leave, I will have no choice but to obey them,” she said.

City authorities’ promises to compensate and help resettle the evicted families have yet to come true.    
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With the arrival of winter in Europe and energy prices soaring, tensions are running high over the provision of gas from Russia — especially through the Yamal-Europe pipeline that runs through Poland and Belarus. 

But the Yamal pipeline is just one part of a complex gas infrastructure network shaped not only by energy needs but also wider economic interests and politics, including strife between Russia and Ukraine. 

The pipeline, opened in 1994, runs over 2,000 kilometers (1,242 miles) to Germany from the city of Torjok in central Russia, transiting through Belarus and Poland. 

It delivers 30 billion cubic meters of gas to Europe each year, making it one of the most important vehicles for the provision of Russian gas to the continent. 

Russia sells Germany gas at a cheaper rate than it does to Poland, in part to make up for the higher transit fees through the longer delivery distance. 

But this means that it is more cost efficient for Poland to buy Russian gas from Germany. 

Some of the gas sold by German traders to Poland flows directly into Polish territory, or if that is not sufficient, the pipeline can also operate in reverse to send more to Germany’s eastern neighbor. 

Since December 21, the pipeline has been operating in reverse, with gas flowing east back into Poland from the German border, according to data from management company Gascade seen by AFP. 

This means that over the last days, Germany itself has not been receiving gas via Yamal. 

Meanwhile, Russian gas continues to flow to Europe through other major pipelines such as Nord Stream I and TurkStream. 

It is not unusual for the Yamal pipeline to operate in reverse for short periods, but this latest about-turn comes against a backdrop of political tension over fears that Russia may invade Ukraine. 

Political pressure 

In Germany, the government has said that in the event of any “escalation”, it will put the brakes on another gas pipeline, Nord Stream 2, which is still awaiting the green light from the authorities. 

Some European states, such as Poland and Ukraine, have accused Moscow and Russian energy company Gazprom of cutting gas supplies to Europe to exert political pressure over these tensions. 

Russian President Vladimir Putin has said the change in gas flow through the Yamal pipeline is purely down to fluctuating orders and denied any political motive. 

Gazprom, for its part, has called accusations that it is failing to deliver enough gas to Europe “absolutely groundless and unacceptable” and blamed Germany for dipping into its reserves to supply neighboring Poland. 

Berlin on Monday denied any intervention on its part. “It is not the government that decides on gas flows, but the market, the traders,” the Economy and Climate Ministry said. 

According to George Zachmann, a specialist in energy issues for the Brussels-based Bruegel think tank, Gazprom may also be “favoring its own pipelines” over those it does not 100% control, such as the Yamal pipeline. 

Low reserves

A spokeswoman for the German Economy and Climate Ministry told AFP that “security of supply is still guaranteed.” 

But Berlin, which has “relatively low” gas reserves with its tanks just 53 percent full, could soon have “difficulties”, according to Christophe Bonnery, president of the Association of Energy Economists. 

“If contracts are adhered to there will be no problems until at least March,” said Zachmann. But “if Russia cannot or will not deliver gas for technical or other reasons, then supplies could fall short.” 

The wrangling comes amid an explosion in gas prices, which are up to seven times higher than at the beginning of the year.

The surge is thought to be partly down to a particularly cold winter and an increase in activity linked to the post-coronavirus economic recovery. 

With 40% of gas consumed in Europe coming from Russia, Moscow is suspected of taking advantage of the tensions on the world market to reduce supply and drive up prices. 

The International Energy Agency (IEA) in September called on Russia to be a “reliable supplier” and send more gas to Europe. 
…

As Europe rang in the New Year 20 years ago, 12 of its nations said goodbye to their deutschmarks, French francs, liras and pesetas as they welcomed the euro single currency. 

On January 1, 2002, euro notes and coins became a reality for some 300 million people from Athens to Dublin, three years after the currency was formally launched in “virtual” form. 

Here is a recap of the event, drawn from AFP reporting at the time: 

In a far cry from the austere New Year’s celebrations imposed by the COVID-19 pandemic 20 years later, fireworks, music and lights blazed at midnight into the early morning of January 1, 2002, to mark the biggest monetary switch in history. 

AFP reported that many people passed on their traditional New Year’s Eve parties, choosing instead to queue up at cash dispensers in their enthusiasm to get hold of the first pristine euro notes. 

In Berlin, Germans said hello to the euro and goodbye to their beloved mark at a special ceremony at the Brandenburg Gate, as up to 1 million people thronged the streets for the traditional giant New Year’s Eve street party there. 

The euro cash was also a hit in the coffee shops and red-light district of Amsterdam. 

Irish revelers were, however, less in a hurry to welcome the euro, continuing to pay for Guinness, Ireland’s favorite tipple, in the national currency, leaving the headache of the changeover until the next day. 

As many feared, the euro switch provoked sporadic price hikes across Europe. 

From Spanish bus tickets, which jumped by 33%, to a Finnish bazaar, where “everything for 10 markka (1.68 euros)” was now “everything for two euros,” many price tags were a bit heftier since the single currency became legal tender. 

The European Central Bank president at the time, Wim Duisenberg, who warned merchants not to take advantage of the euro launch to increase prices, said he had not seen signs of widespread abuse. 

“When I bought a Big Mac and a strawberry milkshake this week it cost 4.45 euros, which is exactly the same amount as I paid for the same meal last week,” Duisenberg told reporters. 

Europe surprised itself with the almost glitch-free transition to the single currency, AFP reported. 

The Germans — reputedly skeptical about the single currency and nostalgic for their mark — turned out to be among the most enthusiastic. 

An editorial in the popular German tabloid Bild proclaimed: “Our new money is moving full speed ahead. No problems whatsoever in saying adieu to the mark, no tears to be shed.” 

Initial “europhoria” was, however, tempered as a few hiccups appeared, such as cash shortages and long lines in banks, post offices and at toll booths. 

France urged citizens to not rush all at once to the banks with their savings, often hoarded under mattresses and in jam jars, since they had until June 30 to get rid of their francs at commercial banks and until 2012 at the Bank of France. 

And the European Commission reported minor problems in getting small euro bills and coins distributed in most countries. 

Duisenberg said, however, he was sure that January 1, 2002, would be written into history books as the start of a new European era. 

 
…

Holiday travelers continued to experience widespread flight cancellations as the omicron variant causes airline staff to call in sick.

According to FlightAware, which tracks delays and cancellations, there have been 2,395 total flight cancellations around the world Monday with 869 of those impacting flights “within, into, or out of the United States.” 

Some 6,342 flights have been delayed around the world with 1,602 delays impacting U.S flights. 

Over the Christmas weekend, thousands more flights were canceled, leaving travelers stranded. 

“We apologize to our customers for the delay in their holiday travel plans,” Delta said in a statement. “Delta people are working hard to get them to where they need to be as quickly and as safely as possible on the next available flight.” 

The holiday season is the busiest time of year for air travel. The U.S. Transportation Security Administration said 2.19 million passengers were screened on Dec. 23, and the previous day saw more travelers than the same day in 2019. 

When things might return to normal is unclear. 

Delta and JetBlue have reportedly asked the U.S. Centers for Disease Control and Prevention to reduce quarantine times for their vaccinated employees. Some airlines are also reportedly offering bonuses to work more to cover for sick employees. 

Amid the scramble, some are expressing concern. 

“We’ve got to make sure employees don’t feel pressured to come to work when they’ve been exposed to COVID or they think they may have the symptoms,” Captain Dennis Tajer, a spokesperson for the Allied Pilots Association, told ABC News. 
…

Investors are closely watching the latest news on the rapidly spreading Omicron variant for signs of how much the virus could impact the U.S. economy and earnings as the market heads into what has historically been a strong time of year for equities.

Overall, the S&P 500 is slightly ahead since Nov. 24, prior to news of the variant hitting markets. It marked a record-high close on Thursday, as encouraging developments gave investors more ease about the economic impact of the variant.

“The market is extremely reactionary now and every little bit of news has a huge impact,” said George Young, a portfolio manager at Villere & Co. Young is planning on taking advantage of any Omicron-induced volatility to add to stocks that rely on tourism and travel such as bank company First Hawaiian Inc . Shares of the company are up 14.4% for the year to date.

The Omicron variant is causing infections to double in 1.5 to 3 days, according to the World Health Organization. The variant now accounts for 73% of all new U.S. cases, up from less than 1% at the beginning of the month.

Still, questions about Omicron’s virulence have made investors less pessimistic than the original reaction. The S&P 500 closed down 2.3% on Nov. 26 after the variant was discovered, on fears of fresh economic lockdowns.

A South African study offered hope about the severity of Omicron and the trend of COVID-19 infections on Wednesday. Shares of vaccine makers slumped in December as investors expect the Omicron variant’s impact to be limited based on recent data.

That bodes well for what is known in the market as a Santa Claus rally. Historically, U.S. stocks have risen during the last five trading days of December and the first two days of January in 56 out of 75 years since 1945, according to data from CFRA Research. This year, the time period starts on Dec. 27. The average Santa Claus rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader’s Almanac.

It is unclear to what extent Wall Street analysts expect Omicron to affect earnings and the economy. Estimated 2022 S&P 500 earnings growth was at 8.3% as of Friday, compared with 8.0% at the start of December, according to Refinitiv data.

Goldman Sachs cut its estimate for U.S. GDP growth to 3.8% from 4.2% due to the uncertainty of the impact of the Omicron wave.

Possible Volatility

While there will likely be some economic impact from Omicron, U.S. consumer spending will likely remain strong, said Cliff Hodge, chief investment officer for Cornerstone Wealth.

He is focused on any signs that Senator Joe Manchin could reach an agreement to support President Joe Biden’s signature $1.75 trillion Build Back Better climate and social spending bill. Manchin, who would provide one of the key votes to pass the bill in a divided Senate, said on Sunday that he could not support the bill in its current form. Senate Majority Leader Chuck Schumer said that the Senate will vote on the bill in early January.

“We need a little bit of good news whether on the Manchin front or Omicron to get a rally going,” Hodge said. “We are fully invested and anticipate a little bit of a relief rally into January.”

The week ahead will be light on economic data, with the release of the S&P Case-Shiller U.S. home price index on Tuesday among the few notable data points.

The lack of new reads of the strength of the economy at a time when coronavirus case counts are rising may leave the stock market more volatile through the end of the year, said Dana D’Auria, co-chief investment officer of Envestnet PMC.

“The market has gotten pretty good at pricing in and leading off from what we are learning about on the health side,” she said.

Should Omicron cases continue to spike or there are signs that economic restrictions could be reimposed, investors will likely rebalance into the shares of giant technology companies such as Apple Inc that have emerged as defensive plays given their large cash positions and revenue growth as a result of remote work, D’Auria said.

“At the end of the day if Omicron really causes problems I would be ready for a more volatile market” well into the new year, she said.
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U.S. airlines called off hundreds of flights for a third day in a row on Sunday as surging COVID-19 infections due to the highly transmissible Omicron variant grounded crews and forced tens of thousands of Christmas weekend travelers to change their plans. 

Commercial airlines canceled 656 flights within, into or out of the United States on Sunday, slightly down from nearly 1,000 from Christmas Day and nearly 700 on Christmas Eve, according to a tally on flight-tracking website FlightAware.com. 

Further cancellations were likely, and more than 920 flights were delayed. 

The Christmas holidays are typically a peak time for air travel, but the rapid spread of the Omicron variant has led to a sharp increase in COVID-19 infections, forcing airlines to cancel flights with pilots and crew needing to be quarantined. 

Delta Air Lines Inc expected more than 300 of its flights to be canceled on Sunday. 

“Winter weather in portions of the U.S. and the Omicron variant continued to impact Delta’s holiday weekend flight schedule,” a Delta spokesperson said in an emailed statement, adding that the company was working to “reroute and substitute aircraft and crews to get customers where they need to be as quickly and safely as possible.” 

When that was not possible, it was coordinating with impacted customers on the next available flight, the spokesperson said. 

Globally, FlightAware data showed that nearly 2,150 flights were called off on Sunday and another 5,798 were delayed, as of 9.40 a.m. EST (1440 GMT). 

Omicron was first detected in November and now accounts for nearly three-quarters of U.S. cases and as many as 90% in some areas, such as the Eastern Seaboard. The average number of new U.S. coronavirus cases has risen 45% to 179,000 per day over the past week, according to a Reuters tally. 

While recent research suggests Omicron produces milder illness and a lower rate of hospitalizations than previous variants of COVID-19, health officials have maintained a cautious note about the outlook.
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Airlines continued to cancel hundreds of flights Saturday because of staffing issues tied to COVID-19, disrupting holiday celebrations during one of the busiest travel times of the year.

FlightAware, a flight-tracking website, noted nearly 1,000 canceled flights entering, leaving or inside the U.S. Saturday, up from 690 flights scrapped on Friday. Over 250 more flights were already canceled for Sunday. FlightAware does not say why flights are canceled.

Delta, United and JetBlue had all said Friday that the omicron variant was causing staffing problems leading to flight cancellations. United spokesperson Maddie King said staffing shortages were still causing cancellations and it was unclear when normal operations would return. “This was unexpected,” she said of omicron’s impact on staffing. Delta and JetBlue did not respond to questions Saturday.

According to FlightAware, the three airlines canceled more than 10% of their scheduled Saturday flights. American Airlines also canceled more than 90 flights Saturday, about 3% of its schedule, according to FlightAware. American spokesperson Derek Walls said the cancellations stemmed from “COVID-related sick calls.” European and Australian airlines have also canceled holiday-season flights because of staffing problems tied to COVID-19. 

For travelers, that meant time away from loved ones, chaos at the airport and the stress of spending hours standing in line and on the phone trying to rebook flights. Peter Bockman, a retired actor, and his daughter Malaika, a college student, were supposed to be in Senegal on Saturday celebrating with relatives they hadn’t seen in a decade. But their 7:30 p.m. flight Friday from New York to Dakar was canceled, which they found out only when they got to the airport. They were there until 2 a.m. trying to rebook a flight.

“Nobody was organizing, trying to sort things out,” he said, faulting Delta for a lack of customer service. “Nobody explained anything. Not even, ‘Oh we’re so sorry, this is what we can do to help you.'” 

Their new flight, for Monday evening, has a layover in Paris, and they are worried there will be issues with that one as well. They have already missed a big family get-together that was scheduled for Saturday.

FlightAware’s data shows airlines scrapped more than 6,000 flights globally for Friday, Saturday and Sunday combined as of Saturday evening, with almost one-third of affected flights to, from or within the United States. Chinese airlines made up many of the canceled flights, and Chinese airports topped FlightAware’s lists of those with most cancellations. It wasn’t clear why. China has strict pandemic control measures, including frequent lockdowns, and the government set one on Xi’an, a city of 13 million people, earlier this week. 

Air China, China Eastern and Lion Air, an Indonesian airline with many canceled flights, did not respond to emails Saturday. 

Flight delays and cancellations tied to staffing shortages have been a regular problem for the U.S. airline industry this year. Airlines encouraged workers to quit in 2020, when air travel collapsed, and were caught short-staffed this year as travel recovered. 

To ease staffing shortages, countries including Spain and the U.K. have reduced the length of COVID-19 quarantines by letting people return to work sooner after testing positive or being exposed to the virus. 

Delta CEO Ed Bastian was among those who have called on the Biden administration to take similar steps or risk further disruptions in air travel. On Thursday, the U.S. shortened COVID-19 isolation rules for health care workers only.
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Kenya’s government recently said it will pay more than $800 million of the debt owed by the national carrier, Kenya Airways, and give it nearly half-a-billion dollars in budget support over the next two years.  Economists disagree on whether the government is making the right move.  

The government recently said it will support the airways for two years to remain competitive.

The government recently requested $800 million from the International Monetary Fund to fund the bailout.  The state owns 49 percent of the airline.

Samuel Nyandemo is a lecturer at the University of Nairobi, teaching economics. He says the government has no business supporting money-losing companies.

“It’s not the work of the government to subsidize non-profit making entities,” Nyandemo said. “Instead, the government should try to privatize such kinds of bodies that are not able to stand on their own feet. So, it’s defeatist for the government to borrow money and start subsidizing a body like Kenya Airways which has monopoly power in the market and this is just because of mismanagement.”

In September, Kenya Airways Chief Executive Officer Allan Kilavuka said the airline suffered a net loss of $100 million between January and June. The company lost $130 million in the same period in 2020.

The airline has been effected by COVID-19-related travel restrictions and flight cancellations.

James Shikwati, a Nairobi-based economist, says the financial hardship caused by the pandemic means the airline is qualified to receive support from the government.

“I think the flexibility of the challenges caused by COVID we would say it makes sense if you keep it alive using all the instruments available that can ensure it goes back to profitability,” Shikwati said. 

Kenya Airways’ financial challenges began in 2012.  

Nyandemo says the carrier is being mismanaged.  

“Kenya Airways has over-employed staff. They are overpaying pilots,” Nyandemo said. “All this has led to inefficiencies in terms of operational cost and that’s why the Kenya airways is not able to break even.  Besides that, there is gross mismanagement.”

The Kenyan government has been pushing for the nationalization of the airline but parliament has so far blocked the action.

The International Monetary Fund said in a statement the government has canceled a plan to fully nationalize the airline.

Shikwati says the airline can be profitable if managed well.

“Kenya Airways and Ethiopian airlines have always been competing,” Shikwati said. “Kenya, in the 80s, chose the path of privatizing as a way to make the airline competitive. I think Ethiopia at that time picked on being national heavy government-supported. So now you compare with the realities going on, creating a mixed bag in my view is not a problem. It should be something that can make the airline remain competitive.”  

Some economists are calling on the airline to restructure its operations, downsize its staff, negotiate new leases and contracts and use the government’s support and authority. 
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Sino-U.S. trade tensions could flare up again as it appears China will miss its obligations under a nearly expired agreement that emerged from a dispute during the administration of former U.S. President Donald Trump, analysts said. 

The Economic and Trade Agreement signed by the two superpowers in January 2020 is set to end December 31. Trade observers say China has not complied with a clause that obligates it to buy imports of manufactured goods, farm products, energy products and certain services from the U.S. at a total of $200 billion more than the 2017 total. China purchased $186 billion in goods and services in 2017 before the trade war, according to U.S. government figures.

China has had trouble complying because of delays in Chinese aircraft orders from the U.S. and pandemic-related setbacks, said Matthew Goodman, senior vice president for economics with the Washington-based Center for Strategic & International Studies, a research group. 

“I do think that the Biden administration is going to follow through on this agreement and hold China to account,” Goodman told VOA. “I don’t see any reason that they’re going to change tack.”

China had met just 62% of its import purchasing goal as of October, according to an analysis by Chad Bown, senior fellow with the Peterson Institute for International Economics, another research organization in Washington. 

U.S. manufacturers may have lacked capacity as well to meet the demand for China-bound goods, said Bashar Malkawi, a University of Arizona law professor who specializes in trade. China’s pandemic-era border closures further harmed U.S. exports, he said.

The nearly four-year-old trade dispute launched by Trump over the Sino-U.S. trade imbalance has placed tariffs on $550 billion worth of goods, including $350 billion originating in China. The dispute also led to a chill in broader two-way relations that would run through Trump’s term. 

“The environment between these two countries is toxic,” Malkawi said. “Trade war and mistrust have been raging since 2018 and will not ease for the foreseeable future.”

What’s next 

The U.S. trade representative’s office did not reply to a query for this report asking whether China had lived up to the agreement. Its website does not indicate what might happen in 2022. 

U.S. Trade Representative Katherine Tai said in a speech at the Center for Strategic & International Studies in October  that the U.S. government will discuss with China its “performance” and that under the agreement, China had made “commitments that benefit certain American industries, including agriculture, that we must enforce.”

The U.S. side will “work to enforce the terms of phase one,” she added, referring to the terms of the deal.

Tai indicated that the United States had yet to review the agreement. 

China hopes the U.S. government “will create favorable conditions for the two nations to expand trade cooperation,” Ministry of Commerce spokesperson Gao Feng said Thursday, as quoted by the China Daily news website. 

Gao said China had “exerted strenuous efforts to offset negative impact from factors such as the COVID-19 pandemic, the global economic recession and the constraint of supply chain” to carry out the agreement, according to the website.

China is the largest goods trading partner of the United States, with $559.2 billion passing both ways in 2020, according to the trade representative’s office.

U.S. goods and services trade with China totaled about $615.2 billion in 2020, with imports at $450.4 billion.

Expiration of the trade deal potentially gives China an opening to negotiate for buying the U.S. goods that it needs, said Song Seng Wun, an economist in the private banking unit of Malaysian bank CIMB. China traditionally buys U.S. foodstuffs, civilian aircraft and aircraft parts. Its tech firms depended on American supplies before the trade war as well. 

“I suppose it always boils down to what China wants to buy and what the U.S. wants to sell,” Song said. “China can be more selective in buying. Politics matters more at this point.” 

Chinese officials might consider asking to buy the U.S. goods that China needs most, possibly swapping out the ones in today’s agreement, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. 

“I think China is probably going to have to try to renegotiate, and the reason probably motivating that will be the volume of supplies of some of the things that it actually needs,” he said.
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Under pressure from U.S. auto safety regulators, Tesla has agreed to stop allowing video games to be played on center touch screens while its vehicles are moving. 

The National Highway Traffic Safety Administration says the company will send out a software update over the Internet so the function called “Passenger Play” will be locked and won’t work while vehicles are in motion. 

The move comes one day after the agency announced it would open a formal investigation into distracted driving concerns about Tesla’s video games, some of which could be played while cars are being driven. 

An agency spokeswoman says in a statement Thursday that the change came after regulators discussed concerns about the system with Tesla.

The statement says NHTSA regularly talks about infotainment screens with all automakers. A message was left Thursday seeking comment from Tesla, which has disbanded its media relations department. 

The agency says its investigation of Tesla’s feature will continue even with the update. 

“The Vehicle Safety Act prohibits manufacturers from selling vehicles with defects posing unreasonable risks to safety, including technologies that distract drivers from driving safely,” NHTSA’s statement said. The agency said it assesses how manufacturers identify and guard against distraction hazards through misuse or intended use of screens and other convenience technology. 

The agency announced Wednesday that it would formally investigate Tesla’s screens after an owner from the Portland, Oregon, area filed a complaint when he discovered that a driver could play games while the cars are moving. 

The agency said that the “Passenger Play” feature could distract the driver and increase the risk of a crash. 

The probe covers about 580,000 Tesla Models S, X, Y and 3 from the 2017 through 2022 model years. 
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