New Delhi

What was expected to be a sudden change in consumer behaviour pegged to the Paris Olympics is now going to be a large financial drag on Delta Air Lines.

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In an interview with CNBC, Delta CEO Ed Bastian broke the news that the company is anticipating a $100 million loss associated with the event, which is slated to begin on July 26.

“Unless you’re going to the Olympics, people aren’t going to Paris...very few are,” said Bastian while speaking to CNBC. “Business travel, you know, other type of tourism is potentially going elsewhere.”

In its bombshell earnings report, issued July 11, Delta disclosed profits slid down steeply. Net income was $1.31 billion for the second quarter of 2024, a plunge of 29 per cent from the same period in 2023. Earnings were $2.36 per share, a penny shy of the consensus estimate of $2.37. 

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On July 11, the shares skidded 4 per cent and lost another 3 per cent the following day. The stock has been down 8.1 per cent so far this month.

Bastian's comments come on the back of a July 1 press release from Air France-KLM, which estimated it would lose €160 million to €180 million due to travellers sidestepping Paris in the Olympic period.

“International markets show a significant avoidance of Paris,” said Air France-KLM in the press release. “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.”

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While the Paris Olympics are due to bring an estimated €6.7 billion to €11.1 billion ($7.3 billion to $12.1 billion) in net economic benefits to Paris—most of it from tourism, according to Reuters—flight bookings to the city, starting June 6, are due to rise by just 10 per cent compared with the same period last year, ForwardKeys data shows. Far from the 115 per cent increase in tourism during the 2016 Rio Games.

According to a study conducted by the University of Limoges, 2.3 million to 3.1 million ticket holders will travel to Paris. This, however, is not materialising in bookings for flights—a challenge not only for Delta but also for Air France-KLM.

In summary, the Paris Olympics, though a potential driver of high economic gains for the city, has had an odd effect: causing economic loss to major airlines through changed travel patterns. This includes Delta Air Lines, which is preparing for huge financial impacts as passengers readjust plans due to this event.