The Air France-KLM Group has acquired a 19.9% stake in SAS Scandinavian Airlines, marking a significant move in the consolidation of the European airline industry. This partnership, which includes other investors such as Castlelake, Lind Invest, and the government of Denmark, is part of SAS’s financial restructuring that helped save the Scandinavian carrier from financial distress. As Air France-KLM’s presence in SAS becomes more prominent, there are key areas to watch in the coming weeks, including the switch from Star Alliance to SkyTeam, changes to route networks and options, and the start of a new era for SAS as it emerges from Chapter 11 bankruptcy proceedings.
The switch from Star Alliance to SkyTeam will have significant implications for loyalty programs, with members being able to earn and redeem points more easily within partner airlines. This move also means SAS passengers will no longer have perks with Star Alliance members. Changes to route networks and options will make it easier for passengers to connect between flights operated by Air France-KLM and SAS, leading to improved connectivity between hub cities and potentially some route rationalization to boost profitability. The completion of Chapter 11 bankruptcy proceedings for SAS marks the start of an exciting future for the airline as it looks to continue its transformation and commitment to achieving net-zero emissions by 2050.
The Air France-KLM Group’s 19.9% stake in SAS may be just the beginning of a larger commercial process, with the potential to increase its shareholding to a controlling position in the future. Analysts predict further consolidation in the European airline industry, with recent deals such as the Lufthansa Group’s acquisition of a stake in ITA Airways. Air France-KLM CEO Ben Smith sees the SAS deal as a low-risk way to participate in consolidation and hints at potential future deals, such as with TAP Air Portugal. However, not all deals have received regulatory approval, as seen with IAG’s terminated takeover of Air Europa.
The European airline industry is undergoing significant changes, with airlines adapting to the post-Covid landscape through partnerships and strategic investments. The acquisition of a stake in SAS by Air France-KLM represents a key step in the consolidation of the industry, with potential for further integration in the future. As airlines look to strengthen their positions and improve connectivity for passengers, the landscape of the European airline market is set to continue evolving in the coming months.
