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 what it might otherwise expect with its record-sized second-quarter revenues.
Delta president Glenn Hauenstein, speaking during last quarter’s earnings call, indicated that the Olympics tend to affect airline revenues negatively. He explained that the type of travelers excited to see their favorite athletes compete internationally are usually not the ones who generate significant revenue for the company. “The Olympics are not good for airline revenues,” Hauenstein stated. “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, Delta’s loyalty partner Air France also announced that the Olympics were negatively impacting revenues, citing a $193 million loss in their case.
Delta, which earns about 20% of its annual passenger revenue from transatlantic flights, could be particularly concerned about this reduced demand. However, Hauenstein reassured analysts that the negative impact of the Olympics should diminish by autumn. “As we look past the Olympics, we see a very robust fall demand for transatlantic travel,” he said.