Raphael Stevens

United’s pilots’ union said there have been record levels of sick calls.
Covid has sidelined crews and caused hundreds of flight cancellations.
United and other carriers have offered staff extra pay to pick up extra trips.

A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.
Justin Sullivan | Getty Images

United Airlines is offering its pilots triple pay to pick up trips for most of January to help ease a staffing shortage driven by the rapid spread of the omicron variant of Covid-19.
United, Delta Air Lines, JetBlue Airways, SkyWest, Alaska Airlines and other carriers have cancelled more than 10,000 combined flights since Dec. 23, citing a combination of bad weather and a surge in sick calls from crews that tested positive for Covid.

The disruptions come during what airline executives forecast as the busiest days since the start of the pandemic.
On Friday, airlines canceled nearly 1,500 U.S. flights, according to flight-tracking site FlightAware. United canceled more than 200, about 11% o f its mainline schedule.
United and the pilots ‘union, the Air Line Pilots Association, reached an agreement for higher pay to cover open trips, Bryan Quigley, United’s senior vice president of flight operations said Friday in a staff note, which was seen by CNBC.
Pilots will be offered three-and-a-half times their pay for flying open trips between Dec. 30 and Jan. 3 and triple pay for picking up trips between Jan. 4 and Jan. 29, the note said.
“Due to the rapid spread of the COVID Omicron variant, we are currently seeing record levels of pilot sick calls,” the pilots’ union wrote to its members. “The impact on the operation is clear and United has experienced a correspondingly large number of cancellations over the past week.”
United’s flight attendants are also getting extra pay to pick up trips and other airlines including JetBlue, American, Southwest and Spirit have also jacked up crew pay to avoid holiday flight disruptions.

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The U.K. Health Security Agency found the risk of hospitalization for people infected with omicron is about a third of that posed by the delta variant.
The study analyzed more than 528,000 omicron cases and 573,000 delta cases from Nov. 22 through Dec. 26 in England.
The new U.K. study also found Covid vaccines reduce the risk of hospitalization from omicron across the board, though a booster dose provides the best protection.

A government advert on a bus stop in London encourages people to get their COVID-19 vaccine booster shots, as the Omicron variant of coronavirus spreads across the globe, Dec. 28, 2021.
Vuk Valcic | SOPA Images | LightRocket | Getty Images

People infected with omicron are less likely to require hospital treatment compared to patients who had delta, according to a large study published by U.K. health authorities on Friday.
The latest data from the U.K. Health Security Agency found the risk of hospitalization for people infected with omicron is about a third of that posed by the delta variant. The study analyzed more than 528,000 omicron cases and 573,000 delta cases from Nov. 22 through Dec. 26 in England.

However, Chief Medical Advisor Susan Hopkins cautioned that it is still too early to draw definitive conclusions about the severity of illness caused by omicron.
“The increased transmissibility of omicron and the rising cases in the over 60s population in England means it remains highly likely that there will be significant pressure on the NHS in coming weeks,” Hopkins said, referring to the U.K.’s National Health Service.
The World Health Organization on Wednesday also warned it is too early to conclude omicron is milder than past Covid variants. Dr. Abdi Mahamud, the WHO’s incident manager for Covid, said omicron has mostly infected younger people so far who generally develop less severe disease.
“We all want this disease to be milder, but the population it affected so far is the younger. How it behaves in the elderly population, the vulnerable — we don’t know yet,” Mahamud said during a news briefing in Geneva.
The new U.K. study also found Covid vaccines reduce the risk of hospitalization from omicron across the board, though a booster dose provides the highest level of protection. The latest data adds to a growing body of evidence demonstrating that although the vaccines have taken a hit from omicron, they still provide significant levels of protection compared to people who are unvaccinated.

CNBC Health & Science

One vaccine dose is 52% effective at preventing hospitalization from the omicron variant, while two doses were 72% effective, according to the study. After 25 weeks, however, the two doses weakened and were 52% effective at preventing hospitalization.
Booster doses significantly increase protection and are 88% effective at preventing hospitalization two weeks after receiving the shot, the study added.
“Protection against hospitalization from vaccines is good against the omicron variant,” the U.K. Health Security Agency concluded in the report.
However, the agency found the current vaccines are less effective at preventing symptomatic infection from omicron compared to the delta variant. The AstraZeneca vaccine, which is approved in the U.K. but not in the U.S., provides no protection against symptomatic infection from omicron 20 weeks after the second dose.
Pfizer and Moderna’s vaccines, the most widely administered shots in the U.S., are only about 10% effective at preventing symptomatic infection from omicron 20 weeks after the second dose. Booster doses, however, increase protection and are up to 75% effective at preventing infection two to four weeks after receiving a third shot. However, boosters weaken after about 10 weeks, providing 40 to 50% protection against symptomatic infection, the study said.
U.K. Health Secretary Sajid Javid said the unvaccinated are eight times more likely to end up in the hospital from Covid.

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Sweetgreen had its mixed IPO late this year, but 2022 may be exciting for the restaurant stock.
The healthy-eating chain is the rare example of a stock creating a new category, similar to Starbucks and Chipotle, Cowen analyst Andrew Charles wrote in a note.
For Sweetgreen investors, the chief question is whether it can expand into the suburbs beyond its core coastal urban markets.

Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, Sweetgreen at the NYSE, November 18, 2021
Source: NYSE

In a year with a spate of restaurant IPO stocks, Sweetgreen — one of the late entries — may have an exciting year ahead, building a new category on the strength of its tech investment.
After a rough 2020, restaurant stocks performed better the following year as vaccinations and loosened restrictions lifted investors’ confidence in the industry.

Swept up in that optimism, five restaurant companies, including Krispy Kreme and Dutch Bros, had their initial public offerings with mixed results.
Salad chain Sweetgreen only debuted in mid-November and it has yet to report quarterly earnings. It went public at $28 a share — soared 76% its first day of trading — but has since fallen amid fears over the Covid omicron variant. It was trading mid-afternoon Friday at about $32 a share.
But some observers see a lot of upside to the stock for 2022.

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“Sweetgreen is in the early stages of creating a new category in the restaurant industry, an opportunity that comes along roughly once every decade following the IPOs of [Starbucks] in 1992, [Chipotle Mexican Grill] in 2006 and [Wingstop] in 2015,” Cowen analyst Andrew Charles wrote in a note to clients on Dec. 13.
What’s more, Sweetgreen has two key ingredients going forward: consumer-facing technology and transparent food-sourcing, Charles said.

Sweetgreen is the first fast-casual salad chain to go public, but it likely won’t be the last. A flurry of rivals like Chop’t, Just Salad and Dig are waiting in the wings with millions of dollars from fundraising.
Goldman Sachs analyst Jared Garber initiated the stock as a buy with a $48 per share price target, saying the company is at the forefront of technological innovation and integration in the restaurant industry, despite its small size. More than two-thirds of Sweetgreen’s sales come from digital transactions, and the company bought robotics company Spyce earlier in 2021.
For Sweetgreen investors, the chief question is whether it can expand into the suburbs beyond its core coastal urban markets before its rivals become a larger threat to its market share.
Morgan Stanley analyst John Glass also wrote in a note to clients that Sweetgreen’s unprofitability could be a concern for some investors, given that the majority of publicly traded restaurants are profitable.
In 2021, Sweetgreen rebounded from pandemic lows, narrowing loses to $86.9 million from a year-earlier loss of $100.2 million, as of Sept. 26. Same-store sales rose 21% during that period.
The coming year is expected to yield more IPOs in the restaurant industry, with P.F. Chang’s reportedly in talks to go public and Panera Bread said in November that it’s planning to return to the public markets.

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Airlines have canceled more than 10,000 flights over the year-end holidays as the omicron variant of the coronavirus spread among crews.
Carriers must refund travelers’ money if they cancel a flight and the customer decides not to take an alternative flight.

Travelers make their way through Miami International Airport on December 28, 2021 in Miami, Florida.
Joe Raedle | Getty Images

Travel in 2021 ended on a stressful note for thousands thanks to omicron. The fast-spreading coronavirus variant has driven up infection rates around the world, including among airline staff.
U.S. airlines have canceled more than 10,000 flights over the year-end holiday period as the variant sidelined pilots and flight attendants and bad weather hit hubs such as Seattle and Atlanta. Thousands more flights were delayed.

It’s a small percentage of overall schedules — about 5%, according to flight-tracking site FlightAware — but it has disrupted the plans of tens of thousands of travelers during what airline executives had forecast to be the busiest time since the pandemic began. Since Dec. 23, more than 15.6 million people have passed through Transportation Security Administration checkpoints at airports, almost double the number a year ago.
Unlike the meltdowns at Spirit, American and Southwest in the summer and fall, the recent spate of disruptions is spread among several airlines, including Delta, United, JetBlue, Alaska and SkyWest.
Here’s what to know:

Refunds

If your airline cancels your flight and you choose not to take an alternate flight, they owe you a refund under federal law. Airlines could offer credit with the airline, but passengers can ask for a full refund. This is the case regardless of the reason for the cancellation: bad weather, staffing problems or other issues, according to the Department of Transportation.
“You can always get your money back if they can’t accommodate you, but it doesn’t get you home,” said Brett Snyder, who runs a travel concierge service and the Cranky Flier travel website.

The DOT also says travelers are owed refunds if their flight is significantly delayed, though it does not define what falls into that category.
“Whether you are entitled to a refund depends on many factors — including the length of the delay, the length of the flight, and your particular circumstances,” it says on its website. “DOT determines whether you are entitled to a refund following a significant delay on a case-by-case basis.”

Rebooking

Airlines attempt to cancel flights long before passengers get to the airport so travelers can make alternative plans, preferably through self-serve platforms on their apps or websites, and don’t overwhelm ticket counters. JetBlue, for example, is trimming about 1,280 flights from its schedule though Jan. 13, ahead of an expected further increase in the number of omicron infections among staff.
“The worst type of cancellation, as we all know, is that cancellation that happens at the airport,” JetBlue CEO Robin Hayes told CNBC on Thursday.
Hold times on airline customer service phone lines during a period of disruptions can sometimes be hours, though some carriers, such as Delta, will ring you back when it’s your turn. Airlines also offer chat services and often respond on Twitter.
Snyder recommends trying all available channels when there are backups.

Passenger cancellations

With omicron continuing to spread, some travelers might opt to put off travel or may test positive and be unable to reach their destination if traveling abroad. Many countries have tightened travel restrictions since the omicron variant was detected in late November. The United States, for example, now requires all inbound travelers, including U.S. citizens, to test negative for Covid within a day of departure.
The State Department on Thursday warned U.S. citizens about international travel, as testing positive in another country could mean travelers have to quarantine abroad, at their own expense, until they test negative.
“Foreign governments in any country may implement restrictions with little notice,” the State Department added.
Large U.S. airlines such as Delta, United and American have done away with the hefty change fees for standard economy tickets and above, both for international and domestic flights. Travelers are still responsible for any difference in fare. Airlines have largely ended pandemic-era fee waivers for nonrefundable basic economy tickets, but travelers should check with their specific airline.

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Whether Covid variants complicate overseas and foreign travel or not, Americans have been busy at least researching — if not necessarily booking — their next big long-distance getaways.
Travel website ParkSleepFly analyzed Google search data from April through September to track where U.S. travelers are looking.
Cancun, Mexico, is our No. 1 dream city stay, while Puerto Rico is the top pick for travel outside the mainland.

Gaviota Azul beach in Cancun, Mexico.
Getty Images

Just as countries have started to lift pandemic travel bans and Americans begin to at least think about booking vacations abroad, the spread of the delta and omicron variants of Covid-19 has thrown the tourism industry’s fortunes to the wind again.
That said, hope springs eternal and U.S. travelers have been busy researching the long-delayed foreign trips they’d like to take once they can. Travel site ParkSleepFly has tracked where they want to go.

Researchers at ParkSleepFly analyzed data on Google searches from April to September by Americans on 168 foreign or overseas destinations in terms of flights, vacations and hotels, totaling them to determine rankings in categories such as the most in-demand countries, most in-demand cities and regions, countries increasing in travel popularity and countries seeing a decrease in interest from Americans.
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The No. 1 overseas destination that Americans are searching is Puerto Rico — technically a U.S. territory but still a flight or cruise away for those on the mainland. ParkSleepFly tracked nearly 1.69 million searches for the island. Rounding out the top five spots were the Maldives, with 491,200 searches; Costa Rica, at 384,600; Aruba, at 379,600; and Mexico, at 361,300.
The website also ranked the cities and regions attracting the most interest; the top 10 are listed in the box below.

Top In-Demand Cities & Regions by Google Search

Travel site ParkSleepFly analyzed Google search data for flights, vacations and hotels by Americans for destinations worldwide to determine the most sought-after holiday spots as we head into 2022. Here’s a look at the top 10 urban and regional spots and the total number of searches in the past six months.

Cancun, Mexico — 638,230
Bali, Indonesia — 448,100
Dubai, United Arab Emirates — 446,100
Bora Bora, French Polynesia — 408,200
Panama City, Panama — 299,210
Paris — 265,400
Cabo San Lucas, Mexico — 252,780
San Jose, Dominican Republic — 225,690
Toronto — 224,130
Rio de Janeiro — 202,550

Source: ParkSleepFly

ParkSleepFly also looked at which countries are falling or rising and in popularity among U.S. travelers. Searches for China travel have plummeted 75% — perhaps not surprisingly, given media coverage of coronavirus, along with current geopolitical tensions. “Following the emergence of Covid-19, China imposed strict border policy and suspended all visas on arrival, so it’s not surprising to see a decline in popularity,” the site wrote in its blog.

In second place for less interest from Americans is Italy, with a 59% drop-off, which ParkSleepFly attributed to the country’s numerous Covid lockdowns this year. At No. 3, Hong Kong — with some of the world’s strictest pandemic border restrictions — saw a 54% fall.

On the bright side, searches increased significantly for overseas or foreign destinations such as the U.S. Virgin Islands, up 98%; the Maldives, up 72%; and Indonesia, with 61% growth. Overseas or foreign cities and regions seeing the highest growth in interest include Saint Thomas in the U.S. Virgin Islands, up 77%; Toronto, up 45%; and Cabo San Lucas, Mexico, up 41%.
For more on the study, and its methodology, go to ParkSleepFly’s website.

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The automotive industry may never be the same after 2021, an infamous year that brought massive changes sparked by supply chain issues and the coronavirus pandemic.
The supply chain issues led to historically low vehicle inventories but also record pricing and profits amid resilient consumer demand and the lack of available cars and trucks.
Aside from the supplies and prices, other changes included electric vehicles, supply chains and new competitors.

The “2021” numerals were towed into Times Square last December by the Kia Sorento SUV after a cross-country road-trip that started at the automaker’s U.S. headquarters in Irvine, California, and covered more than 5,500 miles with stops in 15 states.

DETROIT – The automotive industry may never be the same after 2021, an infamous year that brought massive changes sparked by supply chain issues and the coronavirus pandemic.
The supply chain issues – most notably, a global shortage of semiconductor chips – led to historically low vehicle inventories but also record pricing and profits amid resilient consumer demand and the lack of available cars and trucks.

It’s a situation that some auto executives such as Ford Motor CEO Jim Farley have pledged to continue when the industry is not in a time of crisis because of the higher margins for the automaker as well as its dealers.
“This is a better way to run our business,” Farley told investors earlier this year. “We have the most complicated go-to-market system I think on planet Earth. We could simplify all of that with tighter inventories.”
Instead of a 75-day or more supply of vehicles, Ford is targeting a 50 days’ supply. To help manage this, Farley wants to move the company more to an order-based system instead of customers buying vehicles off a dealer lot. It will help lower discounts from the automaker and allow Ford to better manage its production, he said.

The lower vehicle inventory levels and higher prices this year are among a handful of changes that automotive executives and analysts believe may never go back to pre-2021 levels. Other changes involved electric vehicles, supply chains and new competitors. Here’s additional information on those changes and more.

EVs

From General Motors CEO Mary Barra describing this year as an “inflection point” to nearly all major automakers announcing a pivot to electric vehicles, this year marked a significant shift in tone for the automotive industry and EVs.

Much of that change was led by the rise of Tesla to become the world’s most valued automaker by market cap in late-2020 as well as a greater focus on environmental, social, and corporate governance.

A Rivian R1T electric pickup truck during the company’s IPO outside the Nasdaq MarketSite in New York, on Wednesday, Nov. 10, 2021.
Bing Guan | Bloomberg | Getty Images

While EVs, including plug-in hybrids, remain a niche market at about 4% of the U.S. industry, executives and experts expect an aggressive ramp-up over the next decade.
Most notably, the electrification of pickups began with deliveries of the Rivian Automotive’s R1T in September and the GMC Hummer EV earlier this month. They are expected to be followed by an electric version of the Ford F-150 – America’s best-selling vehicle for decades – in the spring and Tesla’s Cybertruck late next year.

SPACs

Electric vehicle companies going public through special purpose acquisition companies, or SPACs, was a trend that started in late-2020 but accelerated in 2021.
From battery and charging suppliers such as Solid Power or ChargePoint to EV companies such as Lucid Group, such companies have changed the automotive landscape. While some don’t expect all of the companies to succeed, even one or two new companies can put pressure on the legacy automakers to change their direction, as Tesla has proved.

Vehicle inventories

Factory shutdowns starting last spring due to the coronavirus pandemic and occurring now due to a global shortage of semiconductor chips have caused the number of new vehicles available in the U.S. to reach record lows.
Keeping a lower inventory of vehicles is something the automotive industry has played around with in the past but never really been able to keep going; specifically, the Detroit automakers that typically have among the highest inventory levels.
Tyson Jominy, vice president of data and analytics at J.D. Power, believes the longer the lower inventory levels go on, “the more likely it is that these changes can be made permanent.”

Dealer inventory levels across the country remain extremely low due to a semiconductor chip shortage that has led to sporadic plant shutdowns and depleted vehicle inventories in 2021.
Michael Wayland / CNBC

“The challenge is it’s a fixed asset industry and we have a core history of backsliding and producing more because the temptation is always there to cheat, produce one more unit because of the cost efficiencies,” he said.
The auto industry had about 1 million new vehicles on dealer lots in December, which was 1.8 million fewer new vehicles available for consumers to buy this year and 2.5 million less than 2019, according to Cox Automotive. J.D. Power reports national vehicle inventories are at 850,000 vehicles this month, when retail sales are typically 1.4 million.

Prices

The low supplies have led to record dealer profits as consumers are willing to pay more for a new vehicle. Some dealers also are adding markups, or “market adjustments,” on high-demand products. While that’s not unprecedented, the amount and scope is more than ever before, analysts say.
“Everybody’s going to make a lot more money because of it from here on out. I just don’t see it going back to pre-Covid levels,” Sonic Automotive President Jeff Dyke told CNBC earlier this year, saying “the whole ballgame” has changed in the past year.
J.D. Power reports about 89% of new vehicles bought by consumers sold near or above the manufacturer’s suggested retail price, also known as MSRP or sticker price. That compares with 12% in December 2019.
Cox Automotive reports the average list price of a new vehicle last month was about $45,000, up from less than $40,000 a year earlier.
“I would probably argue that some of that could be permanent,” said Jeff Schuster, LMC’s president of the Americas. “I don’t think pricing is going to come back down to pre-shortage levels or incentives are going to increase.”

Supply chains

The chip shortage and electric vehicles are causing automakers to rethink their logistics and supply chains, as companies attempt to safeguard themselves from such a situation ever occurring again.
The changes range from more vertically integrating parts production to forming joint ventures or partnerships with EV battery and chip suppliers.
Toyota Motor earlier this month announced a new $1.29 billion battery plant for electrified vehicles in North Carolina. It followed similar announcements by GM, Ford and others to move production of EV battery components closer to home to reduce costs and lower risks of supply chain disruptions.
“As you would expect, we’re committed to learn from this crisis to be a much stronger company,” Farley said earlier this year. “We’re taking this opportunity to revamp our supply chain to eliminate vulnerabilities down the road.”

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