(BFM Bourse) – The Franco-Dutch group warned that unit revenues of Air France and KLM were under pressure on bookings due to the Olympic Games. Many travelers are avoiding Paris on international flights. The stock is falling without collapsing.
In a session where the stock market weather is mild, with the CAC 40 gaining 1.7% at the same time, Air France-KLM is (a little) struggling. The air transport group’s shares are down 1.5% around 3:15 p.m., after having lost up to 3.8% during the day.
The Franco-Dutch company issued a warning during a review of its bookings on Monday morning. Air France-KLM warned that Air France and Transavia France were experiencing “pressure” on their expected unit revenues for the summer season due to the Olympic Games.
“Significant Paris avoidance behaviour is being observed in international markets. Travel volumes from Paris to other destinations are also below the usual June-August average, with French residents appearing to postpone their holidays until after the Olympics or consider alternative travel options,” the company said in a statement.
Air France-KLM has estimated at this stage a negative impact on its unit revenues of between 160 million and 180 million for the period from July to the end of August.
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The Olympics, far from being a panacea
“Travel volumes to and from France are expected to normalise after the Olympics, with encouraging levels of demand recorded for the end of August and September,” she said.
Air France-KLM will provide further details when it publishes its half-year results on July 25.
Barclays had warned last week in a note that the holding of the Olympic Games would be a headwind for Air France-KLM. The establishment explained that the Olympic Games tend to create significant imbalances in a period of strong activity. Passengers in transit or cargo “could also avoid Paris”, judged the bank.
In 2012, IAG, the parent company of British Airways and Iberia, noted a “certain weakness” in the London market during the London Olympics.
-40% since January
Since the beginning of the year, Air France-KLM has lost 40%, one of the worst performances in the SBF 120. The company has repeatedly disappointed the market with its quarterly results, particularly due to difficulties in aircraft maintenance.
The stock has also been caught up in political risk. Barclays downgraded its view on the stock on Friday, citing uncertainty in France, fearing that “political polarization” would disrupt business and consumer confidence and worsen “social unrest.”
This would penalize the company’s unit revenues. Barclays also cited a risk of increases in labor costs linked to the elections as well as the political context, this time in the Netherlands, with a threat to the capacities of Schiphol airport (Amsterdam), KLM’s hub.
Julien Marion – ©2024 BFM Bourse
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