Air France-KLM to Invest in SAS Amid Bankruptcy Process

SAS Scandinavian Airlines announced it has selected the consortium that will help the airline emerge from its Chapter 11 bankruptcy process.



October 3, 2023

DALLAS — SAS Scandinavian Airlines (SK) announced it has selected the consortium that will help the airline emerge from its Chapter 11 bankruptcy process. Airline group Air France-KLM (AF-KLM) is part of the new investors and will take a non-controlling share in the airline.

The consortium, composed of equity funds Castlelake and Lind Invest, together with the Danish State and AF-KLM, will invest a total of US$1,175 million, which is composed of US$475 million in new equity and US$700 million in convertible debt. This transaction should help SK emerge from Chapter 11 bankruptcy in 2024, though the deal is subject to approval by the bankruptcy court and regulators.

As part of the transaction, AF-KLM will invest US$144.5 million, taking up to a 19.9% stake in the airline. SK will therefore join Skyteam and cooperate commercially with AF-KLM airlines, leaving the Star alliance. This cooperation will allow SK customers to benefit from increased connectivity with the group's network and allow AF-KLM to increase its market share in Northern Europe.

Moreover, according to AF-KLM's press release, the group could even become a controlling shareholder, with over 50% of the voting rights. This could only be completed under certain conditions, including regulatory approval and satisfactory financial performance.

This announcement comes a little more than a year after SK filed for Chapter 11 bankruptcy in the US amid very important financial difficulties. Since then, the airline has been implementing its SAS FORWARD restructuring plan.

In May this year, the court approved the airline's request to be able to conduct a solicitation in order to find investors and emerge from bankruptcy. It is this consortium that was finally chosen in this selection process.

SK is currently a member of the Star Alliance but will leave it to join Skyteam, according to the transaction. Photo: Alberto Cucini/Airways

Executives Comments

SAS Chief Executive Officer (CEO) and President Anko van der Werff said, "The agreed investment is a key milestone in our SAS FORWARD plan, and it shows that our new investors believe in SAS and our potential to remain at the forefront of the airline industry for years to come."

The SAS FORWARD plan was launched a little more than a year ago, just after SK filed for bankruptcy in the United States, in order to restructure the airline and move forward with a new plan.

Moreover, the CEO added, "Our move towards a partnership with SkyTeam determines a clear path forward for the company. Through the completion of this process and the opportunities presented by being part of SkyTeam, we will be able to further enhance SAS’ offerings for the benefit of our colleagues, customers, and communities. We look forward to building a bright future for SAS together."

Ben Smith, AF-KLM's CEO, announced, "This is an important day for SAS and for Air France-KLM. We are pleased to be part of the winning bid consortium selected by the board of SAS. Air France-KLM looks forward to establishing strong commercial ties with SAS."

He highlighted the opportunities linked to this cooperation, adding "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."

SK operates flights from its hubs in Copenhagen (CPH) and Stockholm (ARN) in Northern Europe. Photo: Daniel Crawford/Airways

Consolidation in Europe

This new announcement joins the trend of consolidation in European aviation, with big airline groups investing in their smaller competitors. Indeed, this transaction comes shortly after the investment of Lufthansa (LH) in ITA Airways (AZ), and as the Portuguese government is preparing to sell its national flight carrier TAP (TP).

AF-KLM has not invested a lot in European airlines compared to its two biggest competitors, Lufthansa Group and International Airline Group (IAG), which own British Airways (BA), Iberia (IB), and others. With this new move, the French group moved forward with its intention to "play an active role in the consolidation of European aviation."

In 2023, according to, AF-KLM offered around 90 million seats from Europe, which is approximately 8.5% of the total seat offer during the year. Adding up SK's seat offer, the total reaches 11.4% of the seat offer during the same year. SK has a very high market share in Northern Europe, especially in Denmark and Sweden, where it has 32% of the seat offer.

The new partnership is a setback for the Lufthansa Group, which loses a strategic partner in the Star Alliance and will lose market share in the region, which is conveniently situated not too far from its hubs in Germany.

With this new transaction, SAS hopes to solve its financial problems and emerge from bankruptcy. Meanwhile, AF-KLM is taking part in the consolidation of the market and starting a new strategic partnership in the region.

Featured image: SAS and KLM planes in Amsterdam. Photo: Linus Follert via Flikr CC BY-SA 2.0