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Another airline is losing money because of the Olympics. Delta Air Lines says that reduced travel to Paris because of the games will cost the carrier about $100 million compared to what it might otherwise be expecting with its record-size second quarter revenues.
It’s not an unexpected development. Delta president Glenn Hauenstein told analysts during last quarter’s earnings call that the kind of people who get excited to go see their favorite athletes represent America in international competition are not the same ones who make his company money.
“The Olympics are not good for airline revenues,” he said. “And this year, I think, is no exception to that. So while we see a very favorable backdrop for Europe in its totality, there are some challenges for Paris as generally business travel ceases to and from the local markets as the Olympics approach.”
Earlier this month Air France, which has a loyalty partnership with Delta, also said that the Olympics were a drag on revenues. In their case, the hit was $193 million.
According to its most recent annual report, Delta makes about 20% of its annual passenger revenue from passengers flying across the Atlantic ocean. Depressed demand in that part of the business could be worrying. But Delta says that Olympic drag should fade by autumn.
“As we look at past the Olympics, we see a very robust fall demand for Transatlantic,” Hauenstein told analysts this week.