Scandinavian Airlines System (SAS) is one step close to leaving Star Alliance and joining SkyTeam after a US bankruptcy court blessed a $450 million loan as part of the beleaguered airlines’ restructuring package.
US Court Approves SAS Loan That Would Pave Way For Closer Relationship With Air France-KLM
A bankruptcy court in New York handed SAS a victory on Thursday after approving a $450 million loan from the investment group Castlelake, which together with Air France-KLM and the Danish government, is attempting to bring SAS out of bankruptcy.
The funds will be released next week and be used to pay down debt, part of the restructuring process necessary to navigate SAS out of bankruptcy protection.
The loan is essentially a downpayment on the $1.21 billion (13.2 billion Swedish crowns) restructuring plan that SAS struck with Castlelake and Air France-KLM that would see Air France-KLM take a 19.9% in the company and forge much closer commercial ties, including an alliance switch.
SAS must still gain approval from both the European Commission and a Swedish court before proceeding.
CONCLUSION
Selfishly I know, but I keep hoping that some court will put a stop to all of this so that SAS will remain in Star Alliance. I just flew SAS once again (details are coming) and I will certainly miss his carrier if it pivots from Star Alliance to SkyTeam.
At the same time, I see that SAS is in desperate need of a huge infusion of cash after being mismanaged for so long. With the Swedish and Norwegian governments out, the Danish government growing weary, and private options limited, it makes sense–from a survival perspective–that SAS would take this deal.
It’s now one step closer to reality.
image: Andy Prhat / SAS
Given the announcement this week from Air Canada adding Montreal and Toronto to Stockholm flights, Star seems ready to take the fight right to SAS. I imagine UA will follow soon with new announced flights to Scandinavian cities from IAD, EWR, or ORD.
SAS is about to get their butt handed to them. When the dust settles in a few years they will be nothing but a feeder carrier to AMS and CDG. To quote a line from Indiana Jones…”You have chosen poorly.”
If AC/LH/UA wanted SAS, at all, they would’ve brought them into their JV long ago.
SAS was effectively fighting their own star partners in the JV and every other major JV across the Atlantic. There’s a reason they had to resort to bankruptcy. They should’ve moved to a JV that wanted them long ago.
“They chose wisely “ 😉
A group of airlines wanting another airline to be approved to join a JV is not a given to work. If anything, government regulators should not only be preventing expansions of these cartels from growing in strength, they should be pushing to see them dismantled.
The revenue-sharing JVs have been one of the main drivers in the awful, customer-unfriendly mileage ticket pricing/availability hitting not only customers of the involved carriers but also spreading across the industry as a whole. They have literally exacerbated and expedited the devaluation of the airline loyalty programs.
How is Sky Team going to offer anything more other than a short term cash infusion, and at $400M an amount they will surely burn through in a year? It’s trading one eventuality for the other. I imagine LH did not want to invest in a carrier that refused to accept its future as a feeder to the larger hub operations and offering limited leisure destination flights. At the very least SAS would have had a much better future feeding into FRA, MUC, ZRH etc. As well point to point leisure flights to seasonal resort areas. The end result will be the same, SAS will either become a small regional/holiday airline or die, and would have had a better shot of survival with LH calling the shots to its eventuality.
I myself see this as a shrewd move considering SAS’ “second tier” status within Star Alliance and considering “the airline formerly known as Alitalia” will probably be leaving Skyteam eventually. My one experience short-haul with SAS was good.
Also may want to check “I just SAS once again (details are coming) and I will certainly miss his carrier if it pivots from Star Alliance to SkyTeam.”
With this move, CPH is well positioned to grow as AMS starts to shrink.
Having jumped from United to (among other programs) to Air France/KLM Flying Blue I’m pretty happy that SAS will be joining Sky Team and leaving Star. Try getting a business class ticket around 60K with United to Europe in business class for an award redemption. With AF/KLM you can do that. And they have more transfer partners than just Chase. I’m actually really grateful to United for having gutted their program so much. I had a chance to discover, for example, just how much better Air France is in all regards to United. Been particularly impressed by their Platinum hotline and staff and food onboard. I’ve also seen notable improvements in catering with BA to give another example. United and Lufthansa to Europe just aren’t that great.
The big issue here is if SAS can survive long term. Needs shock therapy to bring its costs in line with the other or end up as a failed flag carrier like so many others. Currently, SAS has three different pilot contracts due to the three Scandinavian countries involved.
Hopefully, Air France/KLM will crack the whip, short out the short comings, and provide a consistent product.
If not, the ULCC will eat the carcass one extremity at a time.
I got in a bunch of status matches for SAS Gold status last month. Should prove useful in various ways.
I am most certainly not welcoming what will happen with mileage ticket pricing and availability as SAS moves into the AF-KL/SkyTeam orbit.
I tend to think it will be better for SAS customers considering how bad redemption pricing tends to be for Euro Bonus travelers on so many redemptions.
From the perspective of a heavy redeemer of miles for partner award travel flights operated by SAS and also for AF-KL flights, the changes to award travel pricing and availability for SK flights will be bad. And from the perspective of big Swedish, Norwegian and Danish redeemers with SAS affiliated bank cards in Sweden and Norway, it’s likely to be painful too.
As a long term EuroBonus Gold as expat Dane, I must disagree. Yes, some Star Alliance awards are quite steep (just booked Thai First BKK-CPH for 135k points + 120EUR), but there are some real steals within SAS, as their award charts are region based. Domestic in Denmark includes Faroe Islands and Longyearbyen (Svalbard) in Norway. So Copenhagen-Faroe that’s 5000 points one way and Copenhagen-Oslo-Longyearbyen that’s 10000. Sas Plus would be 10000 and 15000 respectively. Note also very low fees on Sas own awards (just booked Shanghai-Copenhagen-Shanghai in Business and Economy with 41 EUR in fees). Worth mentioning is also the Sas Mastercard that allows you to redeem Plus and Business for the price of Go awards! (With some requirements). SAS EuroBonus is quite valuable if you know how to use it;)
Warning: GUWonder is a Nazi.
Oct 7, 2023, GUWonder: “I hope they rape more Jews when they’re tortured in Gaza”.
“Loretta Jackson” is peddling a fiction of Loretta Jackson’s own twisted fantasy and engaged in a campaign of baseless character assassination and defamation.
I have long been a fan of the work the SPLC does against the sick thinking of Nazis, other “white supremacists” and other violence-espousing extremist groups regardless of race/ethnicity, religion, nationality and geography of the extremists. Meanwhile “Loretta Jackson” seems to get turned on by the idea of imagining others to be Nazis, but there are all sorts of perverts out there and seems like “Loretta Jackson” is such person with that twisted fetish.
Denmark is going to be starting up a very expensive “environmental” tax to fly out of Denmark and phasing it in between something like 2025 and 2030. A lot of the tax of course has nothing to do with the environmental impact of planes using fuel but will be but a way to fund the Danish welfare state. It will mean yet another devaluation for customers who want to use miles to fly on award tickets out of CPH (and other Danish airports).
GUWonder is a Nazi. Do not hire him, do not let him near your children.
Says the racist “Loretta Jackson” whose overactive imagination invites pity as it’s a sign of a mental health crisis, sociopathic tendencies or a combination of both. LJ, please get yourself some help before you hurt yourself or others.
Meanwhile I am excited to see a SkyTeam (Flying Blue maybe?) option pop up. Wouldn’t mind direct ATL-CPH’s with FB promo rewards
DL used to do ATL-CPH and eventually pulled it. Not sure that some SAS or other feed into/out of CPH nowadays would make ATL-CPH work better with SAS in Skyteam.
Does SAS currently have an interline agreement with KLM?
Yes.