The chief executive of Scandinavian carrier SAS, Anko van der Werff, acknowledges that leaving Star Alliance – which it co-founded – is an emotionally difficult decision, but believes the potential for tighter co-operation with partners within SkyTeam provides greater opportunities.
SAS was a founding member of Star Alliance in May 1997, alongside Air Canada, Lufthansa, Thai Airways and United Airlines. However, it is set to leave to the global grouping this year under a deal to take it out of its formal financial restructuring process with a consortium including Air France-KLM. Under the plan SAS would join its new partners Air France and KLM in the SkyTeam alliance.
Speaking during a session at the Airline Economics Growth Frontiers event in Dublin on 29 February, van der Werff says it is close to finalising a date for the switch of alliance.
”There will be a date when there is a cutover from Star to SkyTeam,” he says. ”Clearly with SkyTeam we are already talking and trying to guage if they are interested, and yes they are. So they do want to have us and I think that is all going to flow quite nicely.
”But it is also complicated, because as an organisation, we were one of the founders of Star Alliance, so the organisation, the relationships we’ve built with individuals at Star, it’s not an easy emotional decision. But we know why we are doing it and are very excited by that future.”
While the initial goal is membership of the alliance, a key attraction is the potential to work together with its new partners in a transatlantic joint venture, something that it never became part of within Star Alliance.
”I’ve been very open about it, I think Ben Smith of Air France-KLM has been very open about it, we have felt left out of some of the Star things – such as the Transatlantic joint venture,” he says.
“I started in KLM in 2000 with the Northwest joint venture, that became the Air France-KLM/Delta joint venture. So I know how powerful that can be,” he says. ”I know for SAS we have been missing that, so I am very much looking forward to consummating the marriage and making sure we become part of something bigger.”
Air France-KLM is taking a 19.9% stake in SAS as part of a consortium including financial firms Castelake and Lind Invest, while the Danish government will remain a shareholder.
While the agreement includes a potential pathway to Air France-KLM taking a controlling interest ultimately, the minority shareholding should make securing regulatory approval easier than has been the case for IAG and Lufthansa Group in their respective moves for Air Europa and ITA Airways. However, van der Werff also notes this make deeper co-operation harder.
”The challenge is we have to realise that AIr France-KLM, when this transaction happens this summer, is only 19.9%,” he says. “So we do want to do more, but it is only 19.9%. So in many ways, they are still arms length.”