Air France-KLM says people avoided Paris during the Olympic Games — and that was bad news for the airline group

Paris hosted the Olympic Games this summer.

Air France-KLM blamed reduced travel to Paris during the Olympic Games as it reported third-quarter earnings below analysts’ expectations on Wednesday.

The group, consisting of the French and Dutch flag carriers and budget airline Transavia, reported an operating profit of 1.18 billion euros ($1.27 billion).

That was below the consensus analyst estimate of 1.24 billion euros and 162 million euros lower than the same period last year.

Air France-KLM said it lost 160 million euros in revenue as a result of this summer’s Paris Olympics.

Its stock fell almost 12% on Thursday morning and has declined 41% this year, valuing the company at about 2 billion euros.

The airline group said that during the games, “international markets showed a significant avoidance of Paris,” while French residents “postponed their holidays.”

It previously warned of this impact in July, saying travel to and from Paris was “lagging behind other major European cities.”

By contrast, London Heathrow Airport said it had a “super summer” with record-breaking passenger numbers. As well as benefiting from visitors coming to the UK for tours by the likes of Taylor Swift, the airport said “Olympic travelers were taking advantage of European city breaks.”

This suggests that people flying to Europe for the games may have arrived in different countries and later traveled by train or other airlines to Paris. According to data from Cirium, Air France flew to 17 destinations in the US during July, compared to 26 for British Airways.

Meanwhile, some European visitors may have avoided Paris this summer due to the Olympics.

An Air France Airbus A319 coming in to land.

Air France-KLM CEO Benjamin Smith said that beyond the financial impact, the Olympics “provided a unique platform to demonstrate the group’s operational expertise and capabilities while offering unparalleled visibility for France as a destination.”

That would be advantageous for the company in the long term, he added.

Air France-KLM also warned of higher costs for staff, operation, and maintenance. It cited a shortage of pilots and technicians, as well as supply chain constraints.

Legacy carriers such as Air France and KLM face ongoing pressure from budget airlines such as Ryanair, easyJet and Wizz, which have lower cost bases that allow them to price seats more keenly.