Scandinavian Airlines (SAS) will leave Star Alliance and join SkyTeam after the Air France-KLM Group bought a major stake in the airline.
As SAS was undergoing a reorganisation process in the United States under Chapter 11 bankruptcy regulations, the airline was looking for new investors.
The Air France-KLM Group, together with some investment companies and the Danish state, were the winning consortium during the exit financing solicitation process.
Air France-KLM will take up to a maximum 19.9% non-controlling stake in the share capital of a fully reorganised SAS.
Move to SkyTeam
The news will also mean that SAS Scandinavian Airlines, which was one of the five founding members of Star Alliance together with Air Canada, Lufthansa, Thai Airways and United, will soon leave the alliance and join the rival SkyTeam alliance.
For SkyTeam, which has Delta Air Lines, Aeroméxico, Air France and Korean Air as its founding members, the addition of SAS to the alliance will be a much-welcomed strengthening of its network.
It will mean a big overhaul of European commercial aviation, given that Italy’s ITA Airways will likely exit SkyTeam and join Star Alliance after Lufthansa required a major stake in the airline.
As the bankruptcy reorganisation plans of SAS have yet to be finalised and still require various approvals, including those from the European Commission as well as Swedish and US courts, it is not yet known when SAS will formally leave Star Alliance and join SkyTeam.
According to the SAS press statement, the airline is “intended to eventually join the SkyTeam alliance” subject to “relevant approvals and emergence from the chapter 11 process” but could not yet give a firm timeline.
SAS President and CEO Anko van der Werff said: “The agreed investment is a key milestone in our SAS FORWARD plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come.
“Further, our move towards a partnership with SkyTeam determines a clear path forward for the company.
“Through the completion of this process and the opportunities presented by being part of SkyTeam, we will be able to further enhance SAS’ offerings for the benefit of our colleagues, customers and communities.”
Air France-KLM stake
Air France-KLM plans to spend a total of 144.5 million USD in their investment in SAS.
The airline group will put 109.5 million USD into common shares and provide 35 million USD as secured convertible bonds to complete the investment.
Air France-KLM CEO Benjamin Smith said: “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 travellers.”
Air France-KLM has bought a stake in SAS, which will eventually lead to the departure of the Scandinavian airline from Star Alliance and its inclusion into SkyTeam.
As the reorganisation plans of SAS still require approval of the relevant authorities and the courts, it is not yet known when exactly SAS will leave Star Alliance and join SkyTeam.
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