Air France-KLM Eyes Major Stake in Scandinavian Airlines SAS

Air France-KLM, the prominent Franco-Dutch airline group, is on the verge of expanding its influence over Scandinavian Airlines (SAS), aiming to secure a majority stake. This strategic move was confirmed by Benjamin Smith, CEO of Air France-KLM, during a recent investor call, highlighting the ongoing negotiations to increase the group’s current 19% shareholding in SAS. Smith’s enthusiasm for the partnership’s success so far underscores the potential benefits of gaining controlling interest in the Scandinavian carrier.

This development comes as SAS shifts its alliance from Star Alliance to SkyTeam, indicating a deeper integration with Air France-KLM and other SkyTeam members. Notably, this transition enables SAS to launch new routes, such as the Copenhagen to Atlanta flight, enhancing connectivity with Delta Air Lines’ major hub. This move is part of a broader strategic alignment, including a transatlantic joint venture involving Air France, KLM, Delta, and Virgin Atlantic, which SAS is expected to join.

Despite the optimism, the acquisition of a majority stake by Air France-KLM requires the surrender of some slots at Amsterdam Schiphol Airport to address concerns over route dominance in Scandinavia. According to ch-aviation capacities data, the combined seating capacity of KLM and SAS on routes from Amsterdam to Scandinavia exceeds 90%, signaling a significant market share that necessitates regulatory considerations.

The pursuit of a larger stake in SAS also reflects on the airline’s ongoing restructuring efforts following its bankruptcy filing in July 2022. With stakeholders including Castlelake, the Danish state, and entrepreneur Henrik Lind, Air France-KLM’s potential rise to a controlling shareholder position within two years signifies a major reshaping of SAS’s ownership landscape and its future strategic direction.

Air France-KLM’s ambition to solidify its partnership with SAS through increased ownership stakes not only demonstrates confidence in the Scandinavian airline’s value proposition but also aligns with broader industry trends of consolidation and strategic alliance shifts. This move could significantly enhance the competitive positioning and operational synergy between the two airlines, marking a new chapter in European aviation dynamics.