Air France-KLM on Thursday noted a sharp drop in its net profit in the third quarter as passengers avoided traveling to Paris during the Olympic Games.
The Franco-Dutch group posted an after-tax profit of 824 million euros ($887 million), down 13 percent from the same three-month period last year.
Air France said in a statement Olympic Games As a result, revenues suffered a €160 million loss due to fewer international tourists to Paris and fewer trips from France.
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Air France CEO Benjamin Smith said the third quarter showed mixed trends for the Air France-KLM group.
‘Revenues continued to grow, driven by increased capacity and strong underlying demand,’ said Benjamin Smith. However, operating income was significantly impacted due to the Paris Olympic Games.’
The group also estimated that its tax bill would increase by 280 million euros if the French government were to implement a planned new tax on aviation.
Air France was also an official partner of the Paris 2024 Olympic and Paralympic Games and has named its latest long-haul aircraft after ‘Paris’, the host city of the 33rd modern-day Olympiad.
The Central Bank of France, however, expressed hope in August this year that the country’s economy would benefit significantly from the Paris 2024 Olympics and Paralympic Games.
The Bank of France said it expected the French economy to expand by around 0.5% in the July-September quarter, after a 0.3% increase in the second quarter.
The Olympic Games officially started in the last week of July and the Paralympic Games ended in September.
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#Financial #loss #French #airline #Paris #Olympics
**Interview with Industry Expert on Air France-KLM’s Q3 Performance**
**Editor**: Thank you for joining us today. We’re discussing the recent financial report from Air France-KLM, which showed a notable drop in net profit for the third quarter. Can you provide an overview of the situation?
**Expert**: Absolutely. Air France-KLM reported an after-tax profit of 824 million euros, which is a 13 percent decrease compared to the same period last year. This decline is particularly interesting given the context of the upcoming Olympic Games in Paris. One would expect tourism and travel to surge during such significant events, yet the opposite seems to be happening.
**Editor**: That’s striking. What do you think are the primary reasons for this unexpected downturn in passenger numbers?
**Expert**: There are a few factors at play. Firstly, there may be a prevailing sense of caution among travelers related to the ongoing global economic uncertainty and rising costs. Many international tourists have been choosing alternative destinations over Paris, and local travelers are possibly avoiding the chaos associated with the Olympics. According to the report, this led to a €160 million loss in revenue due to fewer international tourists and reduced trips within France.
**Editor**: Interesting insights. Do you think that the situation could improve as the Olympic Games progress, or are there longer-term concerns for Air France-KLM?
**Expert**: It’s hard to say definitively. The Olympic Games could still draw travelers who are keen on attending events, which might boost subsequent quarters. However, if economic challenges persist and travel behavior doesn’t bounce back, we might see ongoing difficulties for the airline.
**Editor**: What actions do you think Air France-KLM should consider to address these challenges?
**Expert**: They may need to enhance their marketing strategies, focusing on promoting Paris as a safe and exciting destination. Additionally, offering attractive packages or incentives for international travelers could help. Coupled with ensuring operational efficiency and competitive pricing, that might encourage more people to fly with them during this pivotal time.
**Editor**: Thank you for your insights. It will be interesting to see how Air France-KLM adapts to these challenges in the coming months.
**Expert**: Absolutely. Thank you for having me.
