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SURPRISE: SAS taken over by Air France KLM consortium, leaving Star, joining SkyTeam

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Today was the day that Scandinavian airline SAS was to announce its new shareholders as it completed its financial restucturing.

The belief in the market was that Scandinavian banks and institutions would come together to produce an ‘all local’ deal which kept full control of the airline in the region.

The market was wrong.

SAS acquired by AIr France KLM, to join SkyTeam

Surprisingly, Air France KLM was announced today as the lead partner in the winning bidder for the airline.

Air France KLM will form a consortium with financial firms Castlelake and Lind Invest, together with a contribution from the Danish government, to acquire the airline.

Initially, Castlelake will be the largest shareholder with 32% followed by the Danish government with 26%. Air France KLM will cap its shareholding at 19.9% for now. Some equity will be given to existing creditors of the airline.

Importantly, Air France KLM has agreed that – after no less than two years – it can take a controlling stake in the airline by acquiring shares from other investors.

It has been confirmed that SAS will leave Star Alliance – of which it was a founding member – and join Air France KLM (and Virgin Atlantic) in SkyTeam. The airline will restructure itself to provide greater feed into the existing Air France and KLM operations in Paris and Amsterdam.

SAS taken over by Air France KLM consortium

The new investment totals $1.175 billion. This is made up of a mix of equity ($475 million) and convertible debt ($700m) together with $500m from Castlelake to refinance the ‘debtor in possession’ term loan.

The Air France KLM share of the investment is $145m, of which $110m is equity and the remaining $35m in the form of secured convertible bonds. 

The deal is expected to leave nothing to the existing shareholders of SAS who have been wiped out by the Chapter 11 restructuring. The deal still needs various legal approvals before it can complete and SAS AB is delisted – completion is currently planned for the second quarter of 2024.

SAS Chief Executive Anko van der Werff said:

“Through the completion of this process and the opportunities presented by being part of SkyTeam, we will be able to further enhance SAS’s offerings for the benefit of our colleagues, customers and communities”

Benjamin Smith, CEO of Air France KLM said:

“This is an important day for SAS and for Air France KLM. We are pleased to be part of the winning bidding consortium selected by the board of SAS. Air France KLM looks forward to establishing strong commercial ties with SAS. With its well-established position in Scandinavia and strong brand, SAS offers tremendous potential to Air France KLM. This cooperation will allow Air France KLM to enhance its position in the Nordics and improve connectivity for Scandinavian and European travelers. We look forward to being a part of this new chapter in SAS’ history and thank the board of SAS for their trust.”

You can read more on the Air France KLM website here and in the official SAS release here.

With Lufthansa acquiring Italy’s ITA in a similar staged process and IAG keen to pounce on TAP, we may see three flag carriers absorbed into bigger groups by the end of 2024.


How to earn Flying Blue miles from UK credit cards

How to earn Flying Blue miles from UK credit cards (January 2024)

Air France and KLM do not have a UK Flying Blue credit card.  However, you can earn Flying Blue miles by converting Membership Rewards points earned from selected UK American Express cards.

These cards earn Membership Rewards points:

Membership Rewards points convert at 1:1 into Flying Blue miles which is an attractive rate.  The cards above all earn 1 Membership Rewards point per £1 spent on your card, which converts to 1 Flying Blue mile. The Gold card earns double points (2 per £1) on all flights you charge to it.

Comments (88)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • SteveCroydon says:

    If Emirates joined OneWorld, they would put BA, Iberia and Qantas to shame. In fact I suspect BA would object to their membership of OW.

    • Rhys says:

      I think you’d find Qatar would object to their membership, not BA.

      • Jonathan says:

        Hence is to why there’ll almost never be more than one of the big three Middle Eastern carriers in the airline group at the same time

        There’d just be clashing if the thought ever even came up on a level where anything might happen

        • QFFlyer says:

          We have a strange situation in Australia with the ME3, where VA is partners with both QR & EY, and QF with both QR & EK. In theory this is great.

          The common partnership of QR is particularly odd, as VA, a non-Oneworld partner, seems to get better access to reward space than QF.

    • newbz says:

      Emirates which still has sloping seats in 2-3-2 config in its 777 business class…? Let’s be realistic.

  • dundj says:

    The one aspect of this that is intriguing me is how other loyalty schemes within Sky Team will integrate SAS into their systems for short haul travel. For example, will Flying Blue see SAS Plus as Premium Economy rather than Business, as it would be for long haul?

    If so, then what would normally be considered as a business fare from LHR-OSL-BGO for example which would be expected to earn 21 XP may only earn 14 XP, and routings such as EDI-ARN-OSL-BGO would earn 24 XP rather than 36 XP per one way.

    This is especially the case in that SAS Plus fares for short haul travel tends to be a fairly small incremental increase in price when compared to the SAS Go fares, between £50 and £70 per one way.

    • newbz says:

      Curious whether SAS may see a come back of short haul J with this. It was after all the first airline in Europe which offered SH biz.

      • Rob says:

        I suspect it will if it will be feeding AFKLM long haul.

        • dundj says:

          It would be my expectation as well, though I would not be surprised to see them continue down the route they have followed for a while to come. At least until AF/KL take further ownership stakes after the first 24 months.

  • Jetset Boyz says:

    Given KLM is set to lose slots at AMS over the coming years, this transaction gives them the opportunity to build up Copenhagen, Stockholm or Oslo for North America & Europe connections.

  • Charlieface says:

    Personally I always thought SAS’s biggest problem is that they have three hubs none of which are really big enough for real economy of scale.
    For example they fly to CPH and OSL from some UK airports but not ARN, meanwhile OSL doesn’t have that many intercontinental flights, most go from the other two.
    They should dump one of them, probably Oslo.

    • Bernard says:

      Arm chair management tends to be a lot easier than the real thing!
      There’s no doubt this a huge loss of a Star predisposed frequent flyer pool for Lufthansa (and Turkish). Small countries but wealthy populations that travel a lot (despite the Greta minority).
      What will get interesting is the probable promotional activity Eurobonus will need to make on the changeover.

  • Shaun M says:

    Funny when the airline itself is not ‘loyal’ to its Loyalty Programme

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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