Last fall, it was announced that Air France-KLM, in conjunction with other entities, were selected as the winning bidders in Scandinavian Airlines’s (SAS) restructuring process.
At the time, the Stockholm-based airline had been under bankruptcy protection for more than a year, and was looking to carve itself a new path through the SAS Forward plan.
We now know more about SAS’s plans, including when it will officially exit the Star Alliance and begin integrating with SkyTeam.
Scandinavian Airlines to Leave Star Alliance for SkyTeam
On October 3, 2023, it was announced that Air France-KLM, in conjunction with private investment firm Castlelake, the Danish government, and Lind Invest, were selected as the winning bidders in Scandinavian Airlines’s restructuring.
As part of the deal, Air France-KLM will acquire a 19.99% stake in SAS, Castlelake will acquire a 32% stake, the Danish government will acquire a 25.8% stake, and Lind Invest will acquire an 8.6% stake.
We now know that SAS will leave Star Alliance as of August 31, 2024, at which point it will begin to integrate with SkyTeam, the alliance to which Air France-KLM belongs.
Initially, EuroBonus members will begin to enjoy similar loyalty benefits with SkyTeam airlines as of September 1, 2024. It’s not clear if SAS will officially join SkyTeam at that point, or if it will happen further down the line.
SAS was a founding member of Star Alliance, and its departure will reduce the number of airlines in Star Alliance to 25, and raise the number in SkyTeam to 20.
For its part, Star Alliance has indicated that its other members will continue to serve Scandinavia once SAS makes its formal departure, as indicated in a press release:
Going forward, 17 Star Alliance member airlines will continue to offer direct flights to and from Scandinavia, including Aegean Airlines, Air Canada, Air China, Air India, Austrian, Brussels Airlines, Croatia Airlines, EgyptAir, Ethiopian Airlines, LOT Polish Airlines, Lufthansa, Singapore Airlines, Swiss, TAP Air Portugal, Thai, Turkish Airlines, and United. These Star Alliance member airlines will operate more than 3,700 flights per month to Scandinavia from 23 hubs worldwide, offering customers connections to more than 1,100 international destinations — the most by any airline alliance. In the future, Star Alliance member airlines may bring additional service to Scandinavia.
What Does the Future Hold for SAS and Air France-KLM?
Until August 31, 2024, it’s business as usual for SAS, which plans to continue its operations without interruption until the deal is finalized. If all works out, SAS expects the deal to be implemented in the second quarter of 2024.
Air France and KLM have strong networks operating from their hubs in Amsterdam and Paris, and the addition of SAS would add Nordic hubs to its network.
As it stands, SAS operates long-haul flights out of Copenhagen, Oslo, and Stockholm; however, it’s worth noting that its network isn’t quite as vast as those of Air France and KLM.
Aside from plenty of short- and medium-haul destinations in Europe and its environs, SAS currently only flies to three destinations in Asia, as well as nine destinations in Canada and the United States.
With access to Air France and KLM’s much wider route maps, passengers originating in Scandinavia would enjoy easy access to a broader network, including to destinations in the Middle East, Asia, and South America, as well as more destinations in North America.
It’s worth noting that SAS isn’t the only European airline whose future is in flux at the present.
Recently, Star Alliance member Lufthansa acquired a 41% stake in SkyTeam-member ITA Airways, with options to acquire the rest from the Italian government in the future.
Furthermore, another Star Alliance member, TAP Air Portugal, has been put up for sale by the Portuguese government.
It’s reported that Air France-KLM is one of the interested parties, alongside International Airline Group, which governs Oneworld carriers British Airways, Iberia, Aer Lingus, and Vueling, as well as Star Alliance member Lufthansa.
Depending on the outcomes of the aforementioned sales, the European aviation landscape could look remarkably different in the next few years, which could also include a shakeup to the membership of major airline alliances.
Conclusion
On October 3, 2023, SAS announced the winning group of bidders for its restructuring. Air France-KLM, Castlelake, the Danish government, and Lind Invest have been selected as the parties that will bring SAS out of bankruptcy protection.
We now know that SAS will leave the Star Alliance on August 31, 2024, to join Air France-KLM in the SkyTeam alliance at some point in the future.
Assuming no further hindrances, the deal is expected to be finalized in the second quarter of 2024.
