Air France Braces for €180 Million Hit as Paris Olympics Keep Tourists Away
Air France, the flag carrier of France, is anticipating a significant financial downturn, estimating losses of up to €180 million. This downturn is attributed to a slump in tourist arrivals in Paris during the highly anticipated 2024 Summer Olympics. Despite being the official airline for the games, which mark the first Paris Olympics in a century, running from July 26th to August 11th, Air France is facing disappointing booking numbers.
The airline has observed a notable decrease in bookings from leisure travelers who are seemingly deterred by the prospect of large crowds and inflated prices for accommodations, dining, and tourist activities during the Olympic period. This avoidance of Paris by regular tourists has led to flight bookings to and from the city being significantly lower than those for other major European destinations.
This drop in demand is projected to impact the Air France-KLM Group’s sales by an estimated €160 million to €180 million for the peak summer months of June to August.
In a released statement, the group highlighted, “International markets are showing a clear avoidance of Paris. Travel to and from the city is also below the typical June-August levels, as French residents appear to be postponing their vacations until after the Olympic Games conclude or exploring alternative travel plans.”
However, there is optimism for a rebound in travel to and from France once the Olympics conclude. The airline anticipates a return to normal demand levels starting from late August and throughout September, indicating a temporary postponement rather than a complete cancellation of travel plans.
Earlier in June, Air France maintained a positive outlook, particularly regarding bookings from athletes and para-athletes participating in the Games. The airline initially projected that summer 2024 demand would recover to pre-pandemic levels, fueled by Olympic-related travel.
Tourists capture the anticipation of the Paris 2024 Olympics, photographing the official countdown clock in the city center.
An Air France statement issued on June 11th revealed expectations of transporting a significant portion of Olympic participants: “Based on current reservations, 45 days before the Olympic Games opening ceremony, the company anticipates carrying 20% of all athletes and para-athletes traveling to Paris and France, representing 1 in 5 athletes, primarily from countries including Brazil, the United States, Italy, and Japan.”
Air France projected carrying up to 125,000 passengers daily throughout the summer of 2024, matching the volumes seen during the summer of 2019. The peak arrival period for athletes, delegations, and supporters is expected between July 24th and 26th, with departures concentrated between August 11th and 13th, and August 12th anticipated to be the busiest day.
The airline also identified key markets for Olympic and Paralympic Games supporters, noting that the majority of attendees are expected to originate from the UK, Germany, Italy, the US, and Japan.
Snap French Elections Add to Tourism Uncertainty
Beyond concerns about crowds and inflated hotel prices, the recent political upheaval in France, triggered by snap elections, is adding another layer of complexity to the tourism situation in Paris this summer.
The first round of the French elections took place on June 30th, with the decisive second round scheduled for July 7th. The rise of the far-right National Rally party, led by Marine Le Pen, in recent polls has introduced political uncertainty. While Le Pen’s party proposes tax cuts, their platform also includes stricter immigration policies, contributing to a sense of unease.
Coupled with declining popularity for French President Emmanuel Macron and centrist parties, the increased possibility of protests and social unrest following the final election results is further dampening hopes for a robust summer tourism season in the French capital, compounding the €180 million financial challenge faced by Air France.