Delta Expects $100M Loss From Olympics

Delta is forecasting a revenue loss of 100 million dollars as it approaches the 2024 Olympics in Paris.

Ed Bastian, the airline’s CEO, spoke with CNBC and detailed the Olympics’ impact on major U.S. airlines’ revenue.

While the world will focus on the city as it holds the Olympics and Paralympics, this doesn’t correlate to increased demand for the location, which would bump revenues.

It’s quite the opposite. Bastian states that unless you’re one of the ten thousand plus athletes headed to the location to compete or even a spectator, people avoid the area at all costs.

Part of this avoidance is due to the congestion, heightened security, and limited access to critical landmarks that will be present because of the esteemed games.

Furthermore, because of the significant attention to the location, the price of attractions and especially accommodation has skyrocketed, making an already expensive holiday even more substantial and thus deterring prospective travellers from committing to travel.

The financial hit is such a figure because the U.S. carrier has a significant market share in the location on a standard schedule. Furthermore, Delta has a great working relationship with Air France, and as a result, they both are expecting financial hits.

Air France also published its estimated revenue hit during the Olympic Games, which understandably came in considerably higher than Delta at some USD 195.5 million. This forecasted revenue hit is expected to continue through to the end of August before recovery is expected to come back.

On the other hand, Qantas has relaunched flights to Paris for the first time in two decades and is bumping up services to four times a week just for the Euro summer schedule and the Olympics before it brings flights back to thrice weekly.

The upcoming Olympics are expected to impact each airline differently, as most companies have informed the public that there’s quite an avoidance when travelling to Paris during this period.

Away from Paris and, thus, French operations, Delta is still expecting excellent summer performance and revenue performance as demand continues to grow following a bleak start to the decade.

Summer performance is aided by Asia’s recovery, with Japan seeing solid booking increases and, as a result, higher load factors.