Air France-KLM has warned that the Paris Olympics may not be as profitable as hoped.
On the 1st (local time), Air France-KLM revealed that international tourists visiting the Paris Olympics are significantly fewer than expected, causing a critical decline in flight reservations. The Paris Olympics will start on July 26 and end on the 11th of next month.
According to the Financial Times (FT), Air France-KLM has expressed concern that the number of passengers leaving or heading to Paris has significantly lagged behind other major European cities ahead of the Olympics.
Air France-KLM warned that reservations for Transavia, a low-cost airline under Air France and Air France-KLM, were low, saying, “Looking at the international market trends, it appears that air travelers are seriously avoiding Paris.”
The airline explained that tourists appear to be postponing the travel period to after the Paris Olympics or are looking for alternatives.
Air France-KLM also cited data released by the Paris Tourism Bureau last month which predicted a decrease in Paris hotel reservations during the summer Olympics. As a result, the suffering from the second quarter revenue from June to August hit of between 160 million and 180 million euros (approximately 230 billion to 260 billion won) is expected.
Investment bank Bernstein analyzed that Air France-KLM’s revenue this year will be 13% less than the average analysts’ forecast of 1.35 billion euros ($1.5 billion).
Air France-KLM pessimistically predicted that the number of air passengers visiting Paris would normalize only after the Olympics.
Despite the airline’s pessimistic outlook based on reservations, French tourism authorities are expecting a surge in tourists as 15 million people will visit the Olympics.
Authorities are recommending Parisians to work from home or leave the city during this period due to traffic congestion caused by Olympic visitors. A survey showed that half of the citizens plan to leave Paris for vacations and other reasons.
However, the actual market trend is different. Not only air passengers but also accommodation reservations appear to be subsided. The rental fee for houses listed on Airbnb during the Olympic period is also currently falling.
