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The Paris Olympics are having a negative impact on the revenues of both airlines.
Air France-KLM Group and Delta Air Lines both said the Olympics reduced demand to Paris between June and August, negatively impacting their unit revenues.
Their comments come as the Summer Olympics rapidly approach, with Paris hosting the games and holding its opening ceremony on July 26.
French soldiers patrol a street past a road sign for the “Paris 2024” lane in preparation for the 2024 Paris Olympic Games on July 3, 2024 in Paris. (Julian De Rosa/AFP via Getty Images/Getty Images)
Air France-KLM Group said on July 1 that both its Air France and Transavia brands were “pressuring projected unit revenues for the summer as a result of the Paris Olympics, with traffic to the French capital lagging behind other major European cities.”
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The company estimated the related impact on unit revenue for June to August would be in the range of approximately $174.5 million to $196.3 million (€160 million to €180 million).
An Air France plane lands at Pearson Airport in Toronto, Ontario, Canada on July 1, 2024. (Photo by Mert Alper Dervis/Anadolu via Getty Images/Getty Images)
The airline cited international and domestic travellers trying to avoid Paris during the Olympics, but said Air France-KLM Group expects demand to “normalise” from late August once the games are over.
More recently, Delta Airlines reported seeing impacts related to the Paris Olympics.
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“We are seeing approximately $100 million in impacted travel to Paris from June through August due to the Olympics,” Delta Air Lines President Glenn Hauenstein told analysts and investors on the company’s second-quarter earnings conference call on Thursday. “Excluding this one-time event, summer travel demand to Europe has been strong and consistent with our expectations.”
“We expect approximately $100 million in impact to travel to Paris for the Olympics from June through August,” Delta Air Lines President Glenn Hauenstein told analysts and investors on Thursday. (Nicholas Economou/NurPhoto via Getty Images/Getty Images)
Hauenstein also said the Atlanta-based airline “[s] Following the Olympics, transatlantic demand is expected to remain very strong in the autumn.
Delta Air Lines executives said the company expects third-quarter revenue growth of 2 percent to 4 percent, operating margins of 11 percent to 13 percent and earnings per share of $1.70 to $2.00.
“We remain confident in our full-year outlook of earnings per share of $6 to $7, free cash flow of $3 billion to $4 billion and full-year capital expenditures of $5 billion,” Chief Financial Officer Dan Janke said.
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