Business Treaveler logo

Travel news, reviews and intel for high-flyers

Air France-KLM Group’s Game-Changing Acquisition in SAS

The Air France-KLM Group is acquiring a groundbreaking stake in SAS, one of the original airlines of Star Alliance, which will have to switch to SkyTeam.

by Enrique Perrella

October 3, 2023

Photo: Courtesy of SAS

In a significant development within the aviation industry, the Air France-KLM Group has successfully acquired a 19.9% stake in Scandinavian Airlines System (SAS) as part of the airline’s ongoing restructuring efforts.

This strategic investment bolsters Air France-KLM’s presence in Scandinavia and marks a pivotal moment for SAS, enabling it to shift from the Star Alliance to the SkyTeam alliance.

The Scandinavian flag carrier has been navigating turbulent skies recently, with the airline filing for Chapter 11 bankruptcy protection last year. The turbulence stemmed from various challenges, including a pilot’s strike and the closure of Russian airspace.

Photo: SAS, Airbus A330-300. Courtesy of Beckett P / Unsplash

Despite securing substantial debtor-in-possession funding, SAS’s financial recovery faced delays, leaving the airline searching for a lifeline.

However, SAS’s fortunes turned for the better as a consortium led by Castlelake, Lind Invest, and Air France-KLM stepped in with a significant investment of $1.175 billion.

This consortium’s entry into SAS’s ownership structure breathes new life into the airline, allowing it to shed the confines of bankruptcy protection and begin a fresh chapter.

Air France-KLM’s involvement in this acquisition carries considerable weight. The group, led by CEO Benjamin Smith, is enthusiastic about collaborating with SAS.

Photo: Ben Smith. Courtesy of Air France-KLM

An internal memo written by Smith reveals that the group’s investment in SAS remains within the strategic roadmap. By forging a business alliance with the reputable and long-standing brand SAS, Air France expects to enhance its foothold in the Scandinavian nations and explore opportunities for collaboration between the two loyalty programs.

Likewise, this partnership will extend the Air France-KLM Group’s European market reach, enabling them to serve their customers better and achieve greater success.

Founding Partner to leave Star Alliance

This strategic partnership also marks the end of SAS’s association with the Star Alliance, a development that will undoubtedly reshape the alliance landscape.

While details of the cooperation between SAS and Air France-KLM are yet to emerge, it’s clear that SAS is positioning itself for a closer relationship with the SkyTeam alliance.

Photo: Courtesy of Star Alliance

SAS’s decision to leave Star Alliance is expected to create ripples in the industry, leaving a notable void in the alliance’s coverage of Northern Europe.

The airline’s well-established brand and loyalty program in Scandinavia make it an attractive proposition for Air France-KLM and a potential asset for SkyTeam.

With these developments, SAS is on the path to financial stability and long-term sustainability, steering clear of the looming threat of bankruptcy.

The coming months will likely witness transformative changes as Castlelake, Lind Invest, and Air France-KLM chart a new course for the airline, ensuring its future in a rapidly evolving aviation landscape.