Delta Air Lines is anticipating a financial hit due to reduced travel to Paris for the Olympics. The company estimates a loss of around $100 million, which contrasts with its otherwise record-size second-quarter revenues.
This development was anticipated. Delta president Glenn Hauenstein mentioned during the previous quarter’s earnings call that the type of travelers eager to watch the Olympics in person do not typically contribute significantly to the airline’s profits.
“The Olympics are not beneficial for airline revenues,” Hauenstein remarked. “This year is no exception. While the overall outlook for Europe is positive, Paris presents challenges as business travel generally halts leading up to and during the Olympics.”
Earlier this month, Air France, which partners with Delta, also reported a revenue decline attributed to the Olympics, amounting to $193 million.
Delta generates about 20% of its annual passenger revenue from transatlantic flights. Consequently, the reduced demand in this sector could be concerning. However, Delta believes the negative impact from the Olympics will subside by the fall.
“As we look beyond the Olympics, we anticipate strong demand for transatlantic travel in the fall,” Hauenstein informed analysts this week.