A tourist shops at a store on Nakamise shopping street near Sensoji Temple in Tokyo in April. (Photo … [+] by YUICHI YAMAZAKI/)
AFP via Getty Images
Delta Air Lines executives say passengers are avoiding Paris in July due to the Olympics crush, but they are flocking to Japan.
“We are seeing about a $100 million impact on travel to Paris for the Olympics from June to August,” Delta President Glen Hauenstein said Thursday on the carrier’s second quarter earnings call, referring to second quarter revenues.
Earlier, on CNBC, Delta President Ed Bastian said, “Unless you’re going to the Olympics, people aren’t going to Paris … very few are.” Bastian said. “Business travel, you know, other type of tourism is potentially going elsewhere.”
Meanwhile, Japan has emerged as a hot market, thanks largely to the dollar’s strength against the yen.
“What we’ve seen is really a new Japan as a destination market,” Hauenstein said on the call. “I think when the yen was JPY
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83, it was very difficult to be able to afford to go see Japan and all the great things that Japan has to offer. With the yen at JPY160, it’s a very different world for US travelers, and they seem to be taking great advantage of that.
“The US and Japan business is quite strong,” he said. “It has been since the end of the pandemic.”
Bastian added, “Interestingly enough, Japan has turned into a US point-of-sale leisure market with the Yen hitting at JPY160. So we have really record numbers of US tourists heading to Japan, which is such a great destination.”
Hauenstein said leisure travel in both the transatlantic and the transpacific now remains robust way past the summer, partially because summer temperatures have soared.
“As we look at past the Olympics, we see a very robust fall demand for transatlantic.,” he said. “It is a better time to go to Europe in September and October than it is potentially in July and August when the weather is so hot and everything is so packed.
“The same thing is happening in the leisure markets in the Pacific,” he said.
Who travels after summer ends?
“I think generally, we see the season extending as a whole group of people, whether or not it’s retirees, whether or not it’s people with double incomes and without children, who don’t have the school concerns,” Hauenstein said.
Delta, in combination joint venture partner Air France, is the largest U.S. carrier to Paris. The pair flies non-stop to Paris Charles DeGaulle Airport from Atlanta, Boston, Cincinnati, Detroit, New York, Los Angles, Minneapolis, Raleigh/Durham, Seattle and Salt Lake City.
But United, which has a joint venture with Japanese carrier ANA , is the largest U.S. carrier to Japan. United flies daily to Tokyo Haneda from Chicago, Los Angeles, Newark, San Francisco and Washington Dulles. It also flies daily to Tokyo Narita from Denver, Houston, Los Angeles, Newark and San Francisco, from San Francisco to Osaka. It also serves Japan from Guam.
After Delta reported disappointing results on Tuesday, airline shares all declined. For the week, Delta shares fell 7%, United shares fell 6% and American shares fell 4%. United reports earnings on Thursday, July 18, while American reports a week later on July 25. Theoretically, growth in Japan travel could benefit United more than it benefits Delta.
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