Air France-KLM Group opted to accelerate its acquisition of a controlling share in SAS after seeing the Scandinavian carrier’s rapid progress on financial and operational improvement.
Speaking during a 4 July briefing, Air France-KLM Group chief Ben Smith said SAS’s management team had done “an outstanding job in the last year or two”.
“That’s been extremely reassuring for us,” he says. “We’re really excited and confident that this [transaction] will be super-net positive for our group.”
Its investment as part of a consortium, in August last year, gave Air France-KLM a 19.9% share of SAS when the carrier emerged from Chapter 11 restructuring.
“We had a two-year standstill,” says Air France-KLM chief financial officer Steven Zaat. “What we’re doing is speeding up.”
Zaat says the original plan would have involved commencing a takeover transaction in 2026, with a view to completion in 2028.
But he states that SAS has demonstrated that it is “very well driven” with an “excellent” operational record, while its financial performance is “well ahead of the plan”.
Air France-KLM believes SAS’s earnings margins will contribute to its own 8% target.
“We don’t want to wait any more to see the financial performance improving,” says Zaat, adding that is beginning application proceedings with the European Commission with the aim of securing approval in 2026.
“We want to speed up this process to benefit, first of all, our side for synergies for Air France-KLM but, above all, also for the synergies for SAS – because they’ll really benefit to be part of one group for the future.”
He says the tie-up will unlock multiple synergy avenues, allowing the two sides to optimise their co-operation and codeshare.
Accession of SAS to the transatlantic ‘Blue Skies’ joint venture with Delta Air Lines and Virgin Atlantic is “key” for the Scandinavian carrier, says Zaat, as Air France-KLM moves from a dual-hub to a triple-hub system through the addition of Copenhagen.
Zaat adds that the combination of Air France-KLM’s Flying Blue and SAS’s Eurobonus loyalty programmes will bring coverage to more than 35 million members.
