SURPRISE: SAS taken over by Air France KLM consortium, leaving Star, joining SkyTeam

Today was the day that Scandinavian airline SAS was to announce its new shareholders as it completed its financial restucturing.

The belief in the market was that Scandinavian banks and institutions would come together to produce an ‘all local’ deal which kept full control of the airline in the region.

The market was wrong.

Surprisingly, Air France KLM was announced today as the lead partner in the winning bidder for the airline.

Air France KLM will form a consortium with financial firms Castlelake and Lind Invest, together with a contribution from the Danish government, to acquire the airline.

Initially, Castlelake will be the largest shareholder with 32% followed by the Danish government with 26%. Air France KLM will cap its shareholding at 19.9% for now. Some equity will be given to existing creditors of the airline.

Importantly, Air France KLM has agreed that – after no less than two years – it can take a controlling stake in the airline by acquiring shares from other investors.

It has been confirmed that SAS will leave Star Alliance – of which it was a founding member – and join Air France KLM (and Virgin Atlantic) in SkyTeam. The airline will restructure itself to provide greater feed into the existing Air France and KLM operations in Paris and Amsterdam.

The new investment totals $1.175 billion. This is made up of a mix of equity ($475 million) and convertible debt ($700m) together with $500m from Castlelake to refinance the ‘debtor in possession’ term loan.

The Air France KLM share of the investment is $145m, of which $110m is equity and the remaining $35m in the form of secured convertible bonds. 

The deal is expected to leave nothing to the existing shareholders of SAS who have been wiped out by the Chapter 11 restructuring. The deal still needs various legal approvals before it can complete and SAS AB is delisted – completion is currently planned for the second quarter of 2024.

SAS Chief Executive Anko van der Werff said:

“Through the completion of this process and the opportunities presented by being part of SkyTeam, we will be able to further enhance SAS’s offerings for the benefit of our colleagues, customers and communities”

Benjamin Smith, CEO of Air France KLM said:

“This is an important day for SAS and for Air France KLM. We are pleased to be part of the winning bidding consortium selected by the board of SAS. 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 travelers. We look forward to being a part of this new chapter in SAS’ history and thank the board of SAS for their trust.”

You can read more on the Air France KLM website here and in the official SAS release here.

With Lufthansa acquiring Italy’s ITA in a similar staged process and IAG keen to pounce on TAP, we may see three flag carriers absorbed into bigger groups by the end of 2024.

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How to earn Flying Blue miles from UK credit cards (April 2025)

Air France and KLM do not have a UK Flying Blue credit card.  However, you can earn Flying Blue miles by converting Membership Rewards points earned from selected UK American Express cards.

These cards earn Membership Rewards points:

• American Express Preferred Rewards Gold (review here, apply here) – sign-up bonus of 20,000 Membership Rewards points converts into 20,000 Flying Blue miles. This card is FREE for your first year and also comes with four free airport lounge passes.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

• The Platinum Card from American Express (review here, apply here) – sign-up bonus of 50,000 Membership Rewards points converts into 50,000 Flying Blue miles

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on American Express Platinum is increased from 50,000 Membership Rewards points to a huge 80,000 points. Points convert 1:1 into Avios (80,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

• American Express Rewards credit card (review here, apply here) – sign-up bonus of 10,000 Membership Rewards points converts into 10,000 Flying Blue miles. This card is FREE for life.

Membership Rewards points convert at 1:1 into Flying Blue miles which is an attractive rate.  The cards above all earn 1 Membership Rewards point per £1 spent on your card, which converts to 1 Flying Blue mile.

The American Express Preferred Rewards Gold card earns double points (2 per £1) on all flights you charge to it, not just with Air France and KLM but with any airline.