The number of new COVID-19 infections in NSW has topped 5000 for the second day in a row, swamping contact tracers, overwhelming testing sites and affecting flight schedules as authorities reintroduce mask rules.
Some 5612 people were diagnosed with the virus in the 24 hours to 8pm on Thursday from more than 164,000 tests.
One death was also reported -- a fully vaccinated woman in her 90s who acquired COVID-19 in a Lakemba aged care facility.
While the number of cases dropped by 103 from the record high of the day before, the number of tests increased by more than 3600.
Chief Health Officer Dr Kerry Chant said a notification about a case from a QR code check-in was not necessarily a reason for a PCR test.
"What we are stressing is that is a prompt, a reminder to monitor for symptoms so please get tested if you're unwell but don't get tested unless you are feeling unwell," Dr Chant said on Friday.
She encouraged people to dine outside and prioritise ventilation at events over the Christmas period.
The majority of new cases were in Sydney. The local health district with the most infections was South Eastern Sydney where 1218 new cases were recorded, followed by Sydney (862) and Western Sydney (780).
Multiple Jetstar and Qantas domestic flights out of Sydney have been cancelled on Christmas Eve as frontline staff deemed close contacts are having to test and isolate as the virus spreads through the city.
A Jetstar spokesperson said the airlines were working to accommodate passengers on other flights.
"We appreciate the frustration this causes, especially as customers are travelling for Christmas, and sincerely apologise for the impact these changes are having on travel plans," the spokesperson told AAP.
The spike in case numbers has seen the government reintroduce some restrictions that were only wound back less than two weeks ago.
Almost 30,000 people have been diagnosed with the virus in NSW in the nine days since.
Masks are again required in indoor settings from Friday, with hospitality venues to return to the one person per two-square metre rule and QR codes to be compulsory again from Monday.
The restrictions will last at least a month.
The announcement on Thursday came after the government spent two weeks avoiding mask and QR code mandates by insisting people needed to take "personal responsibility" for their actions.
Deputy premier Paul Toole on Friday defended the approach, saying a lot of people had been "taking personal responsibility".
"They were wearing masks already but what we have done is made sure that... anybody that is in an indoor setting is going to be wearing a mask," he told Nine's Today Show.
The outbreak, spurred on by the highly transmissible Omicron variant, has forced NSW to scale back contact tracing efforts.
Just over one in two - 54 per cent - of people who test positive were fully interviewed by health bureaucrats within a day last week.
The week prior, that figure stood at 94 per cent.
The health care system is also beginning to struggle under the weight of the outbreak.
"About a week ago we had around 300 health professionals that were not able to work because they were isolating, but now we have over 1500 health workers," Mr Toole said.
The number of people in hospital has climbed to 382, up 35, with 53 in intensive care, an increase of eight.
The majority are among the 6.5 per cent of the population that remains unvaccinated, NSW Health says.
Across NSW, 94.9 per cent of people aged 16 and over have received a first dose of a COVID-19 vaccine, and 93.5 per cent have received two doses.
© AAP 2021