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.
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?
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