Delta Air Lines is anticipating a significant financial hit due to the upcoming Olympics in Paris, projecting a $100 million loss in expected revenue. This dip is attributed to decreased travel to Paris during the games, despite Delta’s record-breaking second-quarter revenues.
Delta president Glenn Hauenstein had previously indicated during the last quarter’s earnings call that the Olympics generally have a negative impact on airline revenues. He explained that the kind of travelers attending the Olympics are not typically the high-revenue customers for the airline. Hauenstein noted, “The Olympics are not good for airline revenues, and this year is no exception. While we see a favorable outlook for Europe overall, there are specific challenges for Paris as business travel usually slows down in the local markets as the Olympics approach.”
Air France, which has a loyalty partnership with Delta, also reported that the Olympics were negatively affecting their revenues, with a loss of $193 million.
Delta, which earns about 20% of its annual passenger revenue from transatlantic flights, views the decline in demand around the Olympics period as a temporary setback. Hauenstein reassured analysts that demand should rebound by autumn, stating, “As we look past the Olympics, we see a very robust fall demand for Transatlantic.”