Olympic Games will weigh on Air France-KLM’s activity this summer

Airlines are anticipating a good summer for passenger traffic, but not all of them will be winners. Air France-KLM is anticipating a negative impact of the Games on its revenues, linked to a phenomenon of avoidance of the capital.

In the summer of 2024, passenger traffic is expected to significantly exceed pre-Covid 2019 levels, according to a press release published Wednesday, July 3 by the International Air Transport Association. However, not all airlines will be winners, including Air France-KLM. The Franco-Dutch group warns that its summer revenues will suffer from the Olympic Games, which are causing “significant avoidance behavior” from Paris by international customers. These are the terms of the company’s press release. Concretely, today, Air-France-KLM anticipates a negative impact of the Olympic Games on its revenues, between 160 and 180 million euros between June and August, that is to say at the heart of the competition, while we will be in the middle of the summer season which, usually, allows Air France to fill up with travelers.

In 2024, customers want to avoid Paris with a double effect. First, the pressure on revenues is also seen on Air-France’s low-cost subsidiary, the low-cost subsidiary, Transavia. Second, the volume of trips from Paris to other destinations (European or more distant) is lower than the usual average between June and August. As for French residents, Air France is seeing a postponement of holidays, with air travel, after the Olympic Games.

These projections are consistent with those of the Paris Economic Tourism Observatory, which predicts a 15% drop in international arrivals for July compared to the same period last year, in 2023. For its part, the hotel reservation rate for the first ten days of July is 60%, a drop of around ten points compared to the summer of 2023. The phenomenon of tourists avoiding the capital is obvious and traffic linked to the Olympic Games (delegations, spectators) is not enough to make up for Air France’s shortfall.

If there is an impact on the group’s annual results, it should be limited and partly filled by vacationers’ trips scheduled after the Olympics: after avoidance, catch-up. In 2023, Air France-KLM had made a net profit of 930 million euros during this period. For this year, we will know more when the half-year results are presented on July 25.