Air France Taking Financial Hit Because Of Olympics

The 2024 Summer Olympic Games will be hosted in Paris later this month. On the surface, you’d assume that this is great news for Air France, and that the airline is having a blockbuster summer, given that the airline dominates the Paris market. However, that’s not turning out to be the case.

Why the Olympics is bad news for Air France

Air France-KLM has just issued updated financial guidance, warning that unit revenue in the period of June through August 2024 is expected to take a negative hit of €160m to €180m. This is due to both Air France and Transavia France (Air France-KLM’s low cost carrier) seeing weaker demand than expected over the summer months.

The problem is that traffic to and from the French capital is lagging behind other major European cities. This is due to a few main factors:

  • People are avoiding connecting through Paris airports during and around the Olympics, presumably because they’re expecting the airports will be chaotic
  • Paris doesn’t have its typical summer tourists during the Olympics, given hotel costs and limited inventory, and the average person traveling for the Olympics is staying longer than the average tourist (meaning fewer flights are needed)
  • Residents in France are postponing their holidays until after the Olympics, or are considering alternative travel plans

The company states that travel to and from France is expected to normalize after the Olympics, with encouraging demand levels projected for the end of August and the month of September.

The Olympics isn’t great for Air France

I suppose this isn’t really surprising

While the concept of an airline struggling due to massive demand to and from its hub seems counterintuitive, it actually makes a lot of sense.

Flights to and from Paris will likely be packed before and after the Olympics. However, it’s a different story during the Olympics. I’ve noticed this in my own flight searches, and have even seen a decent amount of award availability on Air France on dates during the Olympics.

The reality is that transatlantic airlines ordinarily need no help filling planes between North America and Europe in summer, even just on a connecting basis. Furthermore, airlines build their networks based on historical demand patterns, and for Air France, that assumes a healthy mix of people traveling to Paris, and connecting onwards.

But it’s not surprising that this is no ordinary summer for Air France, and it can be hard to plan based on that. Ordinarily, those in network planning and revenue management have great tools to plan their strategy, but something like the Olympics makes this infinitely more complicated.

People are avoiding traveling through Paris

Bottom line

Air France has warned that revenue will take a significant hit this summer due to the Olympics. The company is finding that people are avoiding Paris around the Olympics (unless they’re going to the event), and that French people are avoiding travel until after the Olympics.

It’s definitely funny to think that IAG and Lufthansa Group are benefiting more from the Olympics being in Paris than Air France-KLM is.

Are you surprised by the impact the Olympics is having on Air France?

Conversations (34)
The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
Comment as a member

Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.

Type your response here.

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Anyone can comment, and your email address will not be published. Register to save your unique username and earn special OMAAT reputation perks!

  1. Loading comments…
Recent Comments
The latest from the OMAAT community.

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Corrado Soprano Guest

Surprising Delta didn't lend Air France their premium revenue management strategies.

0
‼ 0
Tiger. Guest

Qatar Airways saw an increase in passengers as well as revenue due to the FIFA 2022 which was held in Qatar. They even made a profit that year.

0
‼ 0
iamhere Guest

I think there is another reason. Athletes and teams have their partners already so if the Olympics were somewhere else, AF would presumably be a partner for the French team. Usually teams have a partner from their home country, I guess.

0
‼ 0
Jordan Diamond

Well AF should stop complaining and get the word out that CDG and ORY are quietish during the Olympics, to encourage transit passengers. The airports are not going to be any busier than peak holidays. Honestly, this is the time for savvy "posts" on what people can do with AF during this time. Take advantage of what I'm sure will be some stunning upgrade opportunities. :-)

0
‼ 0
Manny S Guest

AF had also raised their fares obnoxiously, thinking people would bend over backward to go to Paris for the Olympics. I guess that was not the case. Now the fares are back to a more reasonable level, but people don't want to go now with all the commotion in France.

0
‼ 0

Save posts to read later

Saving posts is a member feature. Become an OMAAT member to build a reading list you can come back to from any device.

Become a member
Meet Ben Schlappig, OMAAT Founder
5,883,136 Miles Traveled

43,914,800 Words Written

47,187 Posts Published