In October 2023, we learned that Scandinavian Airlines (SAS) would get an investment from Air France-KLM, and would leave the Star Alliance in favor of SkyTeam. There’s an exciting update, as this process is now complete, so I wanted to cover all the details of this major development.
In this post:
SAS gets new shareholders, including Air France-KLM
In July 2022, SAS filed for Chapter 11 bankruptcy protection. The airline was in a rough financial situation, between the impacts of the pandemic, high costs, and the amount of competition the airline faced in many markets. While SAS intended to significantly cut costs and emerge from bankruptcy protection within a year, that didn’t prove to be so easy.
Eventually a more drastic plan was announced, whereby SAS would get new investors, including airline group Air France-KLM. Specifically, investments in the reorganized airline total $1.16 billion, with US investment firm Castlelake taking a 32% stake, Air France-KLM taking a 20% stake, and the Danish state taking a 26% stake. It’s stated that Air France-KLM may look to increase its stake in the airline in the future.
Well, this process was finally completed a few days ago, and as of August 28, 2024, SAS emerged from Chapter 11 bankruptcy protection. Here’s how SAS CEO Anko van der Werff describes this development:
“This is a historic day that marks the start of an exciting future for SAS’ customers, partners and colleagues. We have successfully completed our restructuring proceedings and we are now entering a new era. It has been a complex process and I’m thankful for the constructive collaboration with creditors and partners, for the valuable support from the Board, as well as impressive efforts, energy and enthusiasm throughout our organization. Efforts that made it possible to save and restart one of the finest companies in Scandinavia. Now, we must look ahead and complete the transformation that we have started, continue our commitment to achieving net-zero emissions by 2050, and take advantage of the opportunities in a growing market. We have an excellent team, we are shortly joining the SkyTeam alliance family, and we have every opportunity to remain a leader in our industry for generations to come.”
SAS leaves Star Alliance and joins SkyTeam
As you’d expect, Air France-KLM investing in SAS has major implications for passengers at the airline. As of August 31, 2024, SAS has left the Star Alliance, of which it’s a founding member. Now as of September 1, 2024, the airline has joined the SkyTeam alliance.
This transition should’ve happened overnight, so you can expect immediate opportunities to earn and redeem points. Furthermore, EuroBonus Silver members get SkyTeam Elite status, while EuroBonus Gold and Diamond members get SkyTeam Elite Plus status.
Since September 1 is a Sunday, I expect it could be a couple of days before all SkyTeam airlines update their websites and systems to reflect SAS being in SkyTeam, but these opportunities should be rolled out pretty quickly.
Long term there’s the potential for SAS to drop its own EuroBonus loyalty program and instead have the airline integrated into the Air France-KLM Flying Blue loyalty program. However, that’s not a sure bet yet, and any potential timeline remains to be seen.
Not only has SAS changed alliances, but the plan is for the airline to join the SkyTeam transatlantic joint venture, which includes Air France-KLM, Delta, and Virgin Atlantic. This will need government approval, so I’m curious if that faces any scrutiny from regulators. You can bet that will take at least several more months to happen, best case scenario.
While I think that both oneworld and Star Alliance are much better alliances than SkyTeam in terms of how seamlessly benefits are offered, I think this is probably pretty logical for SAS (even beyond the Air France-KLM investment).
Keep in mind that as historically, SAS was not part of the Star Alliance transatlantic joint venture, which includes United, Air Canada, Lufthansa, SWISS, Austrian, and Brussels. So the airline was very much treated as a second class member of Star Alliance. Being part of a transatlantic joint venture would allow SAS to potentially command higher fares, which the airline could use.
This is a huge win for Air France-KLM and SkyTeam in terms of connectivity, as the airline group now has a hub in Northern Europe. In the same way, it’s also quite a loss for Star Alliance.
Here’s how SAS CEO Anko van der Werff describes this development:
“This is the beginning of a new era for SAS. Starting today, our customers will experience a smooth transition to SkyTeam, thanks to the tireless efforts of all SAS colleagues. The partnership will open new opportunities for our passengers, expand our global network, and allow us to collaborate closely with like-minded airlines. Together, we will offer even greater value to our customers while strengthening our position in the global aviation market. We’re thrilled to continue connecting the world to Scandinavia and elevate the travel experience for our passengers.”
Bottom line
Major changes have just been made at Scandinavian Airlines. The airline filed for bankruptcy protection in 2022, and has now emerged from that process with new investors. Air France-KLM has taken a stake in the airline, and as part of that, SAS has left the Star Alliance to join SkyTeam.
While I consider SkyTeam to be the least useful alliance for frequent flyers (in terms of reciprocal opportunities), it seems like quite a win for SAS to potentially be able to join one of the “big three” transatlantic joint ventures, which it was excluded from at Star Alliance. Furthermore, closer cooperation with Flying Blue could prove to be a positive for EuroBonus members.
What do you make of these major changes at Scandinavian Airlines?
One interesting implication is that with SAS’ exit, all Star Alliance members now have only white liveries while SkyTeam increases its lead as the alliance with the most non-white liveries.
That said, when ITA moves in the reverse direction (SkyTeam to Star), it will become the first Star member since BMI — which ceased operations in 2012 — to have a blue livery, and one of very few with a non-white livery (pre-2013 Avianca comes to mind)!
Forgetting Air NZ are we? Black Livery
Of course you have every right to be proud of your special black livery, as your username suggests. But Air New Zealand’s standard livery is indeed white, not black! By that token one might include Qatar’s ex-Cathay and Virgin Australia 777-300ERs to have white liveries, even though the standard livery is grey.
SAS doesn't excite me at all. Their product within Europe is WORSE than KLM. SAS sells intra-Europe business-class but, in reality, it's an economy "extra" product. No blocked middle seat, awful drinks, and awful food. Until SAS makes changes, I'll keep flying through CDG on Air France.
SAS does not sell an "intra-Europe business class" nor does it advertise the product as such. It's called SAS Plus and is clearly a Premium Economy product.
Not true. When you book a business-class airfare with a connecting flight, the SAS Plus product is often ticketed into business-class.
AMS is only about 3 degrees south in latitude than SAS’s main hub (CPH), so AMS is sort of a Northern Europe hub too. Actually, AMS has long been one of the best airports for getting from the US to Scandinavia’s main cities. And the guy who is SAS’s CEO and took it into bankruptcy protection into the US and out of it started his Scandinavian airline career by working for AF-KL. That is when...
AMS is only about 3 degrees south in latitude than SAS’s main hub (CPH), so AMS is sort of a Northern Europe hub too. Actually, AMS has long been one of the best airports for getting from the US to Scandinavia’s main cities. And the guy who is SAS’s CEO and took it into bankruptcy protection into the US and out of it started his Scandinavian airline career by working for AF-KL. That is when I first encountered him — when he was working for AF-KL in Sweden.
The move of SAS away from Star Alliance and into SkyTeam is predictably going to lead to a worsening of the frequent flyer program as miles/points earnings and redemptions mean new contracts under newer (and likely higher) prices than the old contracts it had with Star Alliance airlines for mileage/points earning/spending.
I really hope that US and European regulators refuse to allow SAS to be consumed into the DL-AF/KL-Virgin Atlantic revenue-sharing joint venture, since that will make things worse for consumers.
thank you.
CPH is no more part of northern Europe than AMS is.
SAS could not make it as a free agent in a sea of JVs - and that is true with TP and Air Europa and every other mid-size airline.
They aren't going back on big JVs so the only real outcome is to balance them enough that there is still competition.
Nothing is good for consumers if the companies cease to exist.
Didn’t realise that the SAS CEO was a Dutchman.
It should be noted that while ITA will remain a SkyTeam member for a few more months, there doesn't seem to be a plan to implement any cooperation between Volare and Eurobonus. There are no earning charts and websites ignore each other programme. Not surprising given how poor ITA's participation in SkyTeam is in the first place but something to be vary of.
European media says that LH's CEO is headed to Lisbon to talk about a minority investment in TAP and will keep the investment small in order to avoid EU approval.
Air Europa is the biggest airline that is in play in Europe and is in the "outer tier" of SkyTeam airlines.
If LH goes for TP and IAG is blocked from going after Air Europa, it makes it much harder for AE's owners to look elsewhere for a partner or investment.
IAG officially dropped the Air Europa project a few weeks ago.
Well, waited until Sept. 1 to enter Skyteam Elite+ FF number into SAS reservation.....while the portal shows the ST airlines as a choice now, all entries seem to trigger "please enter a valid number" when trying to save...
Got the same message. Tried both AF and DL.
Hi Ben,
Will you do an analysis of using Eurobonus vs. Flying Blue? That would be useful for those who were using those two programs.
I had a look today since you can already book AFKLM with Eurobonus, it seems that there are still a few sweet spots vs flying Blue since it's not dynamic pricing
Those are my findings:
- Europe to Turkey, Armenia and Georgia (SAS put them as...
Hi Ben,
Will you do an analysis of using Eurobonus vs. Flying Blue? That would be useful for those who were using those two programs.
I had a look today since you can already book AFKLM with Eurobonus, it seems that there are still a few sweet spots vs flying Blue since it's not dynamic pricing
Those are my findings:
- Europe to Turkey, Armenia and Georgia (SAS put them as in intra Europe)
- Europe to Sao Tome, Rwanda, Tanzania, Seychelles (SAS put them in north / central Africa) and those routes are pricey in cash
SAS fled to SkyTeam and accepted Air France's investment (in which DL has an equity investment) because the Star alliance kept SK - and other Star carriers as red-headed stepchildren to protect the Lufthansa Group's lock on Europe within Star. LH Group wants no European carrier in the JV that it can't control.
Alliances in Europe are changing. ITA will end up in Star but is far less useful for connections to Europe. The EU...
SAS fled to SkyTeam and accepted Air France's investment (in which DL has an equity investment) because the Star alliance kept SK - and other Star carriers as red-headed stepchildren to protect the Lufthansa Group's lock on Europe within Star. LH Group wants no European carrier in the JV that it can't control.
Alliances in Europe are changing. ITA will end up in Star but is far less useful for connections to Europe. The EU is not allowing IAG to buy out Air Europa so they remain in play. TP could potentially switch alliances....
The focus on "WIIFM" as expressed in the statement about the value of alliances is why this site and others gets basic business decisions about airlines wrong so much of the time. All global EU and US airlines are for-profit and make decisions to maximize their profitability. Giving away the most to retain customers is a sign that a company can't generate revenue o par with competitors.
Yeah, it is odd how Ben seems to judge an alliance based purely on benefits, especially when most of these benefits are lackluster at best.
Here’s a novel idea… how about judging an alliance based on the quality/service of the airlines contained within?
Hi Tim,
When bashing LH for not letting SAS join the UA/AC/LH TATL JV you should keep in mind that ITA was not allowed to join the DL/AF/KL TATL JV…
…
Alitalia was a part of the AF/DL/KL joint venture but was dropped as AZ headed toward restructuring and was replaced in the JV by VS.
in contrast, SK was never a part of the Star JV and you would be kidding yourself if you don't think that the Star non-JV orphans aren't considering what they could be in other alliances.
the SkyTeam JV is a profit-sharing JV so they have much less tolerance for financially...
Alitalia was a part of the AF/DL/KL joint venture but was dropped as AZ headed toward restructuring and was replaced in the JV by VS.
in contrast, SK was never a part of the Star JV and you would be kidding yourself if you don't think that the Star non-JV orphans aren't considering what they could be in other alliances.
the SkyTeam JV is a profit-sharing JV so they have much less tolerance for financially weak players. SK should be very well financially positioned to compete with any other global carrier in Europe.
@Tim they did not really flee. SK has been a financial mess since forever. Air France KLM decided to buy the scraps after yet another near collapse, and accordingly they had to follow their new lords and masters. So probably a bit of a forced hand of who is paying the rescue this time.
I flew SK today (Sep 1st) and they did make a big thing out of the change in their announcements. But in most ways, everything worked well at 6am on day one.
and you have to ask how well SK would have fared if it had been a part of a JV and not left to deal w/ Norwegian and their failed strategies on its own.
Operationally, there is no reason to think that SK won't be the same today as it was yesterday.
It is a new day for them in terms of having a seat at the table with the big boys.
And...
and you have to ask how well SK would have fared if it had been a part of a JV and not left to deal w/ Norwegian and their failed strategies on its own.
Operationally, there is no reason to think that SK won't be the same today as it was yesterday.
It is a new day for them in terms of having a seat at the table with the big boys.
And it is certain that AF/DL/KL and even VS will do what is possible to help ensure SK's success and unique additions to the SkyTeam JV which SK never had the opportunity to demonstrate with Star.
And since LH is investing a wad of money in AZ after its restructuring, it all came down to a game of chess as to who would lose and would gain what.... and what is still on the table to horsetrade around in the future.
@Tim, if they are operationally the same today as they were yesterday, then it is only a matter of time before we need a fresh chapter 11.
They were not part of the UA/LH JV, and they are not a member of the DL/AF JV. They have not applied yet, and so far Jetblue has managed to block even the DL codeshare agreement. Nothing new, nothing better for SK just different partners.
Hopefully the chapter 11, has fixed some of the structural cost issues. But let's see.
Do other people remember that AF-KLM had a c 25% stake in Alitalia around 15 years ago, and they too couldn’t make it fly?
Along the line of what has happened with Avios, it would be particularly nice if more airlines were to adopt Flying Blue points and if those points were freely transferable/usable among member airlines. And, let's hope Etihad joins SkyTeam and the Flying Blue points system.
If SAS decides to destroy eurobonus you'll see a lot of people taking a train or flying to Frankfurt to fly with Lufthansa. Alot of us Nordic people are worried that AFKLM will destroy the brand and turn SAS into a low cost transavia which shouldn't be allowed to happen
…LH recently started a codeshare with Wideroe
@Gg Gg - I really don't understand this sentiment. First of all, Flying Blue is far superior programme in terms of benefits compared to Eurobonus and so is AFKL as an airline. Not sure why would AFKL transform SAS into Transavia but it wouldn't be much of a loss anyone since SAS is essentially an expensive Ryanair at the moment. If anything, the deal makes it more likely for SAS to revert to being a proper legacy carrier with service levels matching those of AFKL.
Taking a train from Oslo to Frankfurt?
Train from Oslo to Malmo, transfer and cross the Oresund Bridge to Copenhagen, transfer at Copenhagen to Frankfurt.
I personally don’t know anyone who has ever done such a train trip to get from Oslo to Frankfurt. Seems like it’s only for people with a lot of time to waste and probably not even cheap to do by train unless booking way in advance.
Just Malmo to Oslo S takes like 7-11 hours to do by trains. Faster to drive that stretch than take a train. Then you add in Frankfurt to Malmo...
I personally don’t know anyone who has ever done such a train trip to get from Oslo to Frankfurt. Seems like it’s only for people with a lot of time to waste and probably not even cheap to do by train unless booking way in advance.
Just Malmo to Oslo S takes like 7-11 hours to do by trains. Faster to drive that stretch than take a train. Then you add in Frankfurt to Malmo by train? I don’t want to even guess how long that takes and what happens if you miss a connection. Berlin is closer to Malmo than Frankfurt and even that Berlin train route has struggled. People in these parts will continue to fly.
I'm sorry, but SAS is worse at least within Europe than KLM. SAS is only better than Transavia. Air France is 100% better than KLM and 200% better than SAS. None of my Swedish friends who are millionaires (in US $) fly SAS. They choose Swiss, Austrian or Lufthansa,