In what seems to be a “Nordic Powerplay,” Air France-KLM now plans to buy 53% of SAS, the well-known Scandinavian carrier. It’s not just another business deal; it could change air travel in Europe (along with the continent’s fragmented airline sector), with carriers seeking to strengthen their positions against rivals.
Under the new arrangement, Air France-KLM will increase its stake in Scandinavian airline SAS to 60.5%, from the current 19.9%. The stakes held by top shareholders Castlelake and Lind Invest will be targeted for the expansion.
This deal, which still needs approval from regulators, will ensure a strong presence for Air France-KLM in the Northern Europe region. It’s a win-win deal for SAS as well, considering the business is trying to recover after going through bankruptcy. The money from Air France-KLM will help it survive and become financially stronger. The value of the investment will be determined at closing, based on SAS’s latest financial performance, including core earnings (EBITDA) and net debt, Air France-KLM said.
On a call with analysts, Air France-KLM’s finance chief, Steven Zaat said, “The company expects to generate “three-digit million” euros in synergies from raising its SAS stake.”
He further said the deal would be funded from cash or a “plain vanilla bond” and would not impact the drive to reduce the group’s hybrid debt.
SAS has had a tough time. The COVID pandemic hit hard, fuel prices went up, and other airlines took market share. Now, this deal could give SAS new life.
SAS will leave the Star Alliance, where it worked with airlines like Lufthansa and United, and will join SkyTeam instead. That’s the group with Air France-KLM, Delta, and others.
“This is a fresh start,” said Benjamin Smith, the CEO of Air France-KLM, while describing the deal as the mechanism opening the door for growth, apart from reflecting the company’s seriousness about its future.
“European consolidation had to happen further, and we’re very happy to be part of that,” SAS CEO Anko van der Werff told Danish broadcaster TV2.
“In the current setup, where Air France-KLM is a 19.9% shareholder, they’re still a competitor. With the new stake, going above 50%, we can really tap into all of those synergies and offer those benefits to customers,” the official stated.
Denmark and Sweden will still own part of SAS, but a smaller portion. Experts say this deal is part of a bigger trend: airlines are joining forces. They want to cut costs and offer more routes together.
If the deal wraps up by the second half of 2026, it could shake things up across Europe. SAS, for its part, will continue to invest in its fleet and network.
Travellers might get more flight options and better connections. For SAS, this is a chance to get back on its feet. And for Air France-KLM, it’s a bold step into a new region with cold weather and big potential.
JPMorgan analysts said there were reasons to be positive about the deal.
In their market note, they commented, “SAS offers deeper access to a GDP-rich region in Scandinavia, and there will now be an opportunity to unlock cost synergies as SAS becomes a subsidiary of the group. Industry consolidation should also be viewed positively for the whole sector, even if not game-changing in terms of size.”
In 2023, Air France-KLM stated it would invest USD 144.5 million for its initial SAS stake, boosting its presence in Sweden, Denmark, and Norway with the option to become a controlling shareholder after a minimum of two years.
While SAS exited Chapter 11 bankruptcy protection in August 2024, the two carriers have already had commercial cooperation since the summer of 2024.