Delta Air Lines is not excited about the Olympics being held in Paris this summer. It expects to take a major revenue hit because of the Games as travelers plan vacations to other European destinations.
Too bad, so sad!
Delta and Air France have a major partnership that put a stranglehold on the U.S. travel market. The two major international carriers boast approximately 70% of the market share for nonstop service between the United States and France. Delta offers the most service to Paris of any U.S. airline.
The Olympic Games is supposedly going to tank business. Air France-KLM forecasted a loss of approximately 180 million euros from June through August because of the sporting competition. People who would normally travel to Paris in the summer are going elsewhere.
International markets show a significant avoidance of Paris. Travel between the city and other destinations is also below the usual June-August average as residents in France seem to be postponing their holidays until after the Olympics or considering alternative travel plans.
— Air France-KLM
Delta is not quite as concerned about the summer months. CEO Ed Bastian predicts a revenue hit of approximately $100 million to Air France’s $195.5 million. Still not great.
Unless you’re going to the Olympics, people aren’t going to Paris … very few are. Business travel, you know, other types of tourism are potentially going elsewhere.
— Ed Bastian, via CNBC
Part of the decreased numbers stems from an overcrowded city. Paris is going to be packed with tourists – and athletes – from the opening of the Olympics on July 26 to the closing on August 11. All of the most popular tourist destinations will be flooded with people who are also in town for volleyball, swimming, archery, track and field, etc. People who are not in town for sports don’t want to deal with the headache.
Hotel prices are also outrageous because of the demand. The cost per room is expected to skyrocket approximately 45% in July and August, according to hotel-data firm STR. Meanwhile, London and Rome will only increase by 2-5%. It is far less expensive to go, well, almost anywhere that isn’t Paris.
If people aren’t going to Paris, Delta is losing money. People aren’t going to Paris because of the Olympics. The Olympics is causing Delta to lose money.