Back on 1 July, the Air France-KLM group also issued a similar profit warning about the Paris Olympics, preparing itself for a €180 million blow to revenue.
Delta Airlines has recently revealed that it is expecting a $100 million (€91.85 million) loss in revenue due to the Paris Olympics, as most tourists and travellers choose to give the French capital a miss due to the excessive crowds and high prices that the event is likely to witness.
Delta, which also has a joint venture with France’s national carrier Air France, is currently one of the major US airlines providing a regular service between the US and Paris.
Apart from tourists and spectators actually going to Paris for the Olympics, most other travellers who are looking for a summer getaway or school break holiday and can be flexible are choosing to wait until late August or even September to travel.
They are also choosing other destinations across Europe and North Africa which, although very popular, are still likely to have less tourists compared to Paris, such as Spain, Italy, Greece, Tunisia, Morocco and Turkey.
However, the company is still confident that summer travel is likely to bounce back in the next few months, with European travel having generally recovered robustly in the last several months. This is also largely due to built-up pandemic demand, which is still being felt, as travelers usually book things like package holidays well in advance.
Glen Hauenstein, president of Delta, said in the company’s June quarter financial results on Thursday, “Peak summer travel demand remains strong and Delta is delivering elevated experiences for our customers. Consistent with our guidance, we generated record June quarter revenue, which was 5.4% higher than the prior year.
“Diverse revenue streams, including premium and loyalty, contributed higher growth and margins, underpinning Delta’s industry-leading financial performance and increasing our financial durability.
“We expect September quarter capacity growth of 5% to 6% and revenue growth of 2% to 4%, with sequential improvement in unit revenue trends through the quarter.”
Delta saw an operating revenue of $15.4 billion for the June quarter 2024, as well as a pre-tax income of $2 billion and earnings per share of $2.36.
Air France-KLM Group also hit by lower travel due to the Paris Olympics
Delta is by no means the only airline which has come under pressure due to the Paris Olympics, with the Air France-KLM group revealing earlier this month that they expected to see a loss of up to €180 million due to the same.
In a statement, the group said, “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 Olympic Games or considering alternative travel plans.
“As a result, Air France-KLM currently estimates a negative impact on its forthcoming unit revenues in an order of magnitude, from €160 million to €180 million for the period June until August 2024. This event has no impact on our guided capacity at this stage. More details will be provided during the Group’s half-year results, on 25 July.”