It has been a transformative few years for Scandinavian Airlines (SAS). In July 2022, the company filed for Chapter 11 bankruptcy protection. Two years later, the company emerged from this process, with new investors, including Air France-KLM, plus a switch from Star Alliance to SkyTeam.
There’s now an update, as Air France-KLM intends to increase its stake in SAS, going from a minority stake to a majority stake.
In this post:
Air France-KLM increasing SAS stake from 19.9% to 60.5%
Air France-KLM has revealed that it will initiate proceedings to take a majority stake in SAS. Air France-KLM currently holds a 19.9% stake in the Scandinavian carrier. Over the past year, we’ve seen the airlines implement closer commercial cooperation, including in the form of codeshares, mutual alliance membership, and more.
Now Air France-KLM is ready to take this to the next level, by increasing that stake to 60.5%. This would come in the form of Air France-KLM acquiring the stakes held by Castlelake and Lind Invest. Meanwhile the Danish state would retain its 26.4% stake in SAS, and its seats on the Board of Directors.
The value of Air France-KLM’s investment in SAS would be determined at closing, based on SAS’ latest financial performance, including EBITDA and net debt. Subject to the obtaining regulatory approval, the ambition is to close in the second half of 2026 (though expect that regulatory approval could prove to be quite a process).
The decision to acquire this increased stake in SAS is driven by the significant improvement of SAS’ financial and operational performance, the success of the current commercial cooperation, and Air France-KLM’s confidence in the Scandinavian carrier’s long term potential.
We’ve seen SAS make all kinds of changes in recent times, beyond joining SkyTeam. SAS is focusing on turning Copenhagen (CPH) into a global hub, reintroducing business class on short haul flights, adding free Starlink Wi-Fi, and renewing its short haul fleet.
Here’s how Air France-KLM CEO Ben Smith describes this decision:
“We are excited by the prospect of fully welcoming SAS into the Air France-KLM family. Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline’s potential will continue to grow through deeper integration within the Air France-KLM Group. This operation would benefit our customers and all Scandinavians who would enjoy enhanced connectivity, as well as the SAS teams whose dedication has been key to restore their airline to its rightful place. They would join a group of airlines united by a shared commitment to excellence and a more sustainable future for air transport. We look forward to this new chapter in our shared journey.”
The implications of SAS joining Air France-KLM Group
What are the implications of Air France-KLM acquiring a majority stake in SAS? To state the obvious, SAS would become a subsidiary of the Air France-KLM Group, alongside Air France, KLM, and Transavia.
Furthermore, the plan would be for Air France-KLM and SAS to “fully unlock their synergy potential via a comprehensive integration in all areas of business, including loyalty, and would extend beyond commercial activities.”
So it sounds like SAS would likely join Air France-KLM’s Flying Blue program, SAS would join the SkyTeam transatlantic joint venture, etc.
Global aviation in Europe is dominated by the “big three” airline groups (Air France-KLM, IAG, and Lufthansa Group). Geographically, there’s certainly merit to Air France-KLM Group expanding its airline geography a bit, given that Amsterdam and Paris are only 250 miles apart, and have similar geography for the purposes of connectivity.
Even competitively, this acquisition feels like fair game. IAG and Lufthansa Group both have at least three global carriers, while Air France-KLM has only had two up until this point. That’s not to say that the deal won’t face some regulatory challenges, but I think it should ultimately be allowed by regulators.
I have to imagine that this majority stake acquisition will only be the start of more consolidation in Europe. Air Europa, Condor, LOT Polish Airlines, TAP Air Portugal, etc., all seem like fair game.
Bottom line
Air France-KLM intends to increase its stake in SAS, from 19.9% to 60.5%. The hope is that this deal will close in the second half of 2026. It sounds like the plan is for SAS to join the Flying Blue program, become part of the SkyTeam transatlantic joint venture, etc.
When Air France-KLM acquired a minority stake in SAS, we knew that a majority stake was also a possibility, so this isn’t a huge surprise. Let’s see how this all plays out…
What do you make of Air France-KLM acquiring a majority stake in SAS?
This is great for the SAS Millionaires who got in on the promo late last year. Eurobonus being integrated into FlyingBlue would offer a lot more destinations on points, cheaper Economy awards, and more award seats available in premium cabins.
This would be terrible for SAS, they have definitely turned it around and I will do anything to avoid AF/KL their XP point earning etc is awful, EuroBonus isn't perfect but it's easy to understand etc. I'm all for them taking a 49.9% but I suppose with the already lack of competition in Europe of major carriers I'm not surprised anymore.
So Lufthansa Group will finally have a proper competition within Europe? Cool!
Hopefully this would mean access to more lounges when flying SAS in business or with status. SAS currently do not pay for lounge access in a lot of airports (including my local) which is very annoying.
I think that was always going to happen with the introduction of business class in October. I don't think they can get away with selling full-blown European business class tickets without lounge access.
this has been one of the fastest and best-executed takeovers of the 2nd tier group of European "mini-flags"
SK successfully restructured after its business was destroyed by ultra low fare competition that ultimately failed but CPH is still a great and underdeveloped location for a global hub despite Russian airspace restrictions.
Scandinavian infighting about which hub would be the the largest were resolved in reorganization.
Letting go of ITA in exchange for SK...
this has been one of the fastest and best-executed takeovers of the 2nd tier group of European "mini-flags"
SK successfully restructured after its business was destroyed by ultra low fare competition that ultimately failed but CPH is still a great and underdeveloped location for a global hub despite Russian airspace restrictions.
Scandinavian infighting about which hub would be the the largest were resolved in reorganization.
Letting go of ITA in exchange for SK will pay enormous dividends in every metric for years to come.
Even though the cooperation with DL is just beginning, DL's network will be of far greater value to SK than UA's ever was - esp. now that the data confirms that DL has handedly overtaken UA as the largest airline in NYC with 50% more flights and 25% more passenger boardings than UA in May.
UA is a necessary market for all TATL airlines and when you lead by that much, all of your partners benefit.
NYC is a necessary market for all TATL airlines and when you lead by that much, all of your partners benefit.
There where statements that Ben Smith confirmed outright that Eurobonus would be integrated into FlyingBlue, I even saw a clip that seemed to be from the official press release. However, reading the press release avaliable on afkl website, no such statement is given, so will be exciting to see how this plays out.
Given the lack of avaliable tickets for booking with EB points I for one welcome this change, as I'd rather have avaliable...
There where statements that Ben Smith confirmed outright that Eurobonus would be integrated into FlyingBlue, I even saw a clip that seemed to be from the official press release. However, reading the press release avaliable on afkl website, no such statement is given, so will be exciting to see how this plays out.
Given the lack of avaliable tickets for booking with EB points I for one welcome this change, as I'd rather have avaliable tickets even though the dynamic pricing for FB surely will increase the cost.
Yes, a double edged sword! It’s very frustrating that SAS Eurobonus charges double points for China Airlines, Vietnam Airlines and Air Europa, and Flying Blue certainly get more partner (and own) award availability altogether. However, Flying Blue’s taxes and charges are very high compared to Eurobonus. I also find the Eurobonus Elite contact team great on e-mail so would miss them if gone.
Better start spending those points before the devaluation.
LOT is definitely not up for sale or consolidation. They and their shareholders actually have an ambition to become part of big 3 (big 4) themselves, although multihub strategy seems abandoned for now.
They should be trying to buy TAP, there's so little overlap and so much potential for synergies between them.
Very happy for SAS. The future is going to be much better for them.
No.
Yes. Better than Star.
This sucks
No.
@Ben interesting article. Would also like to hear your take on AFKL's introduction of "Basic" economy below "Light" with no cabin bags and no XP earning.
Wow, Ben. Traveling in Europe and I see readers of OMaaT are subjected to 137 tracking companies? Holy surveillance state, Batman.
For context, most websites have 5-20 trackers. Even major sites average around 64. This site is running a full-blown data harvesting operation with companies storing cookies for up to 10 years and collecting everything from your precise location to "probabilistic identifiers" (fancy term for digital fingerprinting).
Not great vibes for readers.
Wow, Ben. Traveling in Europe and I see readers of OMaaT are subjected to 137 tracking companies? Holy surveillance state, Batman.
For context, most websites have 5-20 trackers. Even major sites average around 64. This site is running a full-blown data harvesting operation with companies storing cookies for up to 10 years and collecting everything from your precise location to "probabilistic identifiers" (fancy term for digital fingerprinting).
Not great vibes for readers.
@Lotta:
How do you see this. I am very concerned about my privacy and do all possible to restrict such tracking and sharing my data as much as possible.
Amazing that Europe allows users to see who is tracking them when they visit a site but the USA does not. I stumbled upon this on my last trip to Europe. Eye opening.
It's striking AF-KLM haven't really done more acquisitions tbh when you look in comparison to Lufthansa or IAG. So this makes sense. Although it doesn't expand their geographical hub reach. by that much given Copenhagen SAS's main hub isn't that far from Amsterdam and Paris, and remains in Northern Europe.
It was part of the bailout conditions during COVID and also their previous attempts have failed. Alitalia was supposed to be bought out by AFKLM about 15 years ago. Even JAL was seeking investments from them. The company doesn't have a very successful track record of acquisitions. SAS is an exception and the future may hold Air Europa (more likely) and WestJet (somewhat likely after Delta's investment with options for an AFKLM investment)
Don't forget AF's attempt to purchase CSA back in the day :) I still think that's the biggest wasted opportunity as it would give them a geographically diverse hub and access to many (back then) emerging markets where they still lack position.
I agree that CPH isn't ideal for longhaul, but strong Scandinavian network will give AFKL (and their joint venture) a new USP. Eventual MAD hub via UX would be a gamechanger.
Let’s see what happens at the Battle for TAP! AF/KLM are certainly interested.
Many very worried people at Embraer this week.