Paris Olympics Negatively Impacts Airline Earnings for Delta, Air France
Delta Airlines
Delta Air Lines CEO Ed Bastian has reported that the carrier expects to see $100 million in losses during the Olympic period due to a lack of bookings to Paris-Charles de Gaulle. Bastian explained, “Unless you’re going to the Olympics, people aren’t going to Paris — very few are.” He noted that business travel and other types of tourism are being diverted elsewhere.
Air France
Air France, Delta’s international partner, has also forecast significant losses. The airline expects a shortfall upwards of $195 million due to reduced demand, as travelers avoid Paris during the event. The parent group of Air France, which includes KLM and Transavia, estimated a negative impact on unit revenues in the range of €160 million to €180 million for June to August 2024. However, they anticipate normalization post-Olympics, with encouraging demand levels projected for late August and September.
Factors Deterring Travel to Paris During the Olympics
Cost
Travel and flight expert Daniel Burnham explained that cost is the biggest factor limiting Parisian tourism this summer. He highlighted that high prices for accommodations and travel are deterrents for the average middle-class traveler. Post-Covid travel spending has decreased, and price sensitivity has returned.
Accommodations
Burnham noted that even for those who have booked flights, the high cost of accommodations in Paris is a further deterrent. Hotel prices have surged, with many rooms costing two to three times more than in 2023 and some properties enforcing lengthy minimum stays. As a result, some spectators are planning to stay in other European cities and commute to Paris for specific events.
Local Residents
Many local residents, who would typically vacation in August, are staying put, further impacting the usual tourist influx.
Long-term Benefits for Air France
Burnham predicts that Air France may see long-term benefits from infrastructure projects enabled by the Olympics, such as the recent upgrades to Paris Orly Airport. These improvements could enhance the airline’s operational capacity and customer experience in the future.
Finding Affordable Hotels in Paris
For those seeking affordable accommodations during the Olympics, Burnham advises widening the search beyond central Paris. Suburban areas with direct rail links to the city center, such as those surrounding Disneyland Paris, offer more affordable options. Some bargains can still be found in these areas, with rooms under $200 per night.
Alternative Cities
Burnham also suggests considering other French cities hosting Olympic events, such as Bordeaux, Nantes, Lyon, Saint-Étienne, Nice, and Marseille. These cities are likely to have fewer crowds and lower prices compared to Paris.
Post-Olympics Airfare Discounts to Paris
Burnham highlights that excellent fares to Paris and Europe, in general, are expected in late August, right after the Olympics conclude on August 11. Going has found fares in the $400 to $500 range, with lower accommodation prices. This period represents a “sweet spot” for late summer travel, as the crowds will have left, and tourists who avoided the Olympics will not have returned yet. Additionally, Europeans who delayed their vacations will likely travel in September.
In conclusion, while the Paris Olympics present challenges for airlines and travelers, there are opportunities to save by planning strategically and taking advantage of post-Olympic travel deals.
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