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.
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?
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