Delta Air Lines is anticipating a significant financial impact due to reduced travel to Paris for the Olympics, estimating a loss of around $100 million compared to expected revenues based on its record-sized second-quarter earnings.
Delta’s president, Glenn Hauenstein, highlighted during the last quarter’s earnings call that the typical audience for the Olympics does not align with their most profitable customers. “The Olympics are not good for airline revenues,” he stated. “This year is no exception. While we see a positive overall outlook for Europe, there are specific challenges for Paris as business travel generally halts as the Olympics approach.”
Similarly, Air France, which has a loyalty partnership with Delta, reported a revenue hit of $193 million due to the Olympics. Delta earns about 20% of its annual passenger revenue from transatlantic flights, so a dip in this segment is concerning. However, Delta expects the negative impact from the Olympics to diminish by autumn.
“We see very robust fall demand for Transatlantic travel once the Olympics are over,” Hauenstein reassured analysts this week.