Delta Air Lines (DAL) It is apparently facing a $1 million loss due to an unexpected change in consumer behavior that is tied to a major event set to begin later this summer.
Delta CEO Ed Bastian has revealed that the company is facing a $100 million loss and that the upcoming Paris Olympics, which begin July 26, are to blame, according to a new report. interview with CNBC.
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“Unless you go to the Olympics, people aren’t going to Paris… very few are,” Bastian told CNBC. “Business travel, you know, other types of tourism, is potentially going elsewhere.”
In Delta's latest earnings reportIn a July 11 report, the company revealed a significant earnings miss. During the second quarter of 2024, it generated net income of $1.31 billion, down 29% from the second quarter of 2023. Its earnings were $2.36 per share, below the consensus estimate of $2.37.
Shares fell 4% on July 11 and another 3% on Friday. So far in July, the stock is down 8.1%.
Bastian's comments come after Air France-KLM revealed in a statement on July 1 Press release which will also lose between 160 and 180 million euros (equivalent to about 174 to 196 million dollars) as travellers avoid Paris.
“International markets are showing a marked tendency to avoid Paris,” Air France-KLM said in a press release. “Travel between the city and other destinations is also below the usual June-August average, as residents in France appear to be postponing their holidays until after the Olympic Games or considering alternative travel plans.”
The Paris Olympics are expected to bring between €6.7 billion and €11.1 billion (equivalent to $7.3 billion and $12.1 billion) in net economic benefits to Paris, with tourism a major contributor, according to a recent study. study By the University of Limoges. In addition, between 2.3 and 3.1 million tourists with match tickets are expected to visit the region.
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Despite the expected boost to the Paris economy, flight bookings to Paris, starting June 6, are expected to rise only 10% year-over-year, according to data from ForwardKeys, which was reported by ReutersThis is a big difference from the 115% increase in tourism that Rio faced for the 2016 Rio Games.
Reuters also revealed in its report that “high prices and security concerns” are causing travelers to avoid visiting the region amid political unrest.
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