Delta Air Lines is anticipating a significant financial impact due to the upcoming Olympics, with the company predicting a loss of approximately $100 million in comparison to expected earnings based on their record-breaking second-quarter revenues. The reduced travel to Paris, driven by the games, is the primary factor behind this forecasted downturn.
Delta’s president, Glenn Hauenstein, shared insights during the previous quarter’s earnings call, noting that the Olympics historically have not been favorable for airline revenues. He emphasized that the demographic interested in attending the Olympics does not align with Delta’s most profitable customer base.
“The Olympics are not good for airline revenues,” Hauenstein said. “And this year, I think, is no exception to that. While we anticipate strengths in Europe overall, Paris will face challenges as business travel to and from the city generally decreases with the Olympics approaching.”
Echoing Delta’s concerns, Air France, which has a loyalty partnership with Delta, also reported a financial setback due to the Olympics, estimating a $193 million drop in revenues.
Delta’s annual report indicates that about 20% of its passenger revenue comes from transatlantic travel. A continued decline in demand in this segment may be concerning, but Hauenstein reassured that the impact of the Olympics is expected to dissipate by autumn.
“As we look past the Olympics, we expect very robust fall demand for Transatlantic travel,” Hauenstein told analysts this week.