Advertisement
News by VICE

The Paris Attacks Cost Air France $55 Million in Lost Revenue

Canceled flights, a lull in bookings and heightened security at Paris airports have made a significant dent in the airline's activities.

by Sarah Francoise
Dec 8 2015, 5:15pm

Photo via Wikimedia Commons

The November 13 terror attacks in Paris that killed 130 people are taking a toll on the French economy by hurting tourism to the country -- and the biggest French airline is feeling the pain.

Flight cancellations and a dip in bookings since the attacks have cost Franco-Dutch carrier Air France-KLM 50 million euros ($55 million) in revenue losses in November compared to the same month last year, the group's Chief Financial Officer Pierre-François Riolacci has said.

Speaking to reporters during a conference call Tuesday, Riolacci noted that the attacks had "noticeably affected" traffic to and from the French capital. While the impact of the attacks was being felt across all the airline's markets, Riolacci singled out travelers from Japan and North America as being particularly keen to avoid Paris since mid-November.

The city – which usually attracts throngs of Japanese tour groups – already suffered a decline in foreign visits after the Charlie Hebdo shooting in January. According to French daily Le Figaro, the number of Japanese tourists in the French capital was down by 22 percent in the first half of 2015.

The airline's load factor, a key measure that looks at the percentage of seats filled on average, was down by 0.9 points after the attacks, after having gained 2.7 points in the two weeks leading up to the attacks, Air France-KLM said in a statement.

Meanwhile, Air France said the company's cargo activity was down 11.3 percent this month, after being slowed down by the "increased security measures in place at Charles de Gaulle airport because of the attacks."

The CFO also noted that, while reservations were "noticeably down" in the immediate aftermath of the attacks – with many travelers avoiding the city or canceling existing travel plans – ticket sales were now back to normal, meaning, "passengers are booking travel for January, February and March."

Even with the attacks, the load factor is still up by 0.6 percent this month, and the number of passengers has increased by 0.3 percent, the carrier said, adding that the revenue losses would not affect the company's overall financial forecast for 2015.

It has been a turbulent few months for Air France, which has been fighting against unions to introduce cost-cutting measures – including significant job losses. In October, an angry crowd of striking staff stormed a management meeting and ripped the shirt off the back of Air France's human resources director.

Air France-KLM is not the only airline to have experienced traffic disruptions since the Paris attacks and the crash of a Russian passenger plane in Egypt's Sinai Peninsula in October – a crash that has since been claimed by the Islamic State as its bombing attack.

On Monday an Air France flight from San Francisco to Paris was diverted to Montreal following an anonymous bomb threat that turned out to be a hoax.

As well as affecting France's flagship airline, the attacks have also dealt a blow to France's economy, causing the Bank of France to revise its 0.4 percent forecast for French economic growth for the fourth quarter of 2015 down to 0.3 percent – the equivalent of 500 million euros in losses ($544 million). The bank said the attacks had primarily affected the leisure, hotel and restaurant sectors.

Speaking to AFP Friday, a spokesperson for the bank said the impact of the attacks on the French economy would be "transitory and limited."

Despite this dip in fourth quarter predictions, the bank's macroeconomic projections for December maintain that, "the forecast is still for 1.2% growth in the French GDP [for 2015 as a whole], which is unchanged versus the June projection."

In June, Paris came in second after London in the MasterCard Global Destination Cities Index, a tally of the world's most visited cities. According to the study, Paris is projected to receive 16.06 million foreign visitors this year, but no updated forecast is available to reflect the hit the November attacks may have on this number.  

Photo of Air France Airbus A380-800 via Wikimedia Commons.