Could The Olympics Be Bad For Airlines In LA? United’s CFO Seems To Think So

In a move that might surprise some industry enthusiasts, United Airlines (NYSE: UAL) CEO Scott Kirby recently argued that the Olympic Games will be a net negative for airlines in Los Angeles, as core business travel patterns will freeze due to the leisure-driven demand that will pull travelers to the city. Kirby’s argument here is supported by the fact that corporate clients tend to impose travel freezes during the games and avoid host cities due to overcrowding, eroding high-yield revenue streams as leisure demand rises considerably. This will shift the price mix towards cost-sensitive tourists, which will put pressure on yield and fill seats with lower ancillary spending.