Another airline is facing financial challenges due to the Olympics. Delta Air Lines has announced that reduced travel to Paris because of the games will cost the carrier around $100 million compared to expected revenues for the second quarter.
Delta’s president, Glenn Hauenstein, indicated that this decline is not surprising. During the last earnings call, he pointed out that sports enthusiasts traveling for the Olympics are not typically the airline’s most lucrative customers.
“The Olympics are not good for airline revenues,” Hauenstein said. “And this year is no exception. While we see a very favorable backdrop for Europe overall, there are some challenges for Paris as business travel generally ceases to and from the local markets as the Olympics approach.”
Earlier this month, Air France, which has a loyalty partnership with Delta, also reported that the Olympics were negatively impacting their revenues. They estimated a $193 million loss due to the event.
Delta’s most recent annual report shows that approximately 20% of its annual passenger revenue comes from transatlantic flights. This decline in demand is concerning, but the airline is optimistic that the situation will improve by autumn.
“As we look past the Olympics, we see a very robust fall demand for Transatlantic travel,” Hauenstein told analysts this week.