SAS is set to exit the Star Alliance and join rival SkyTeam after founders Air France-KLM supported a $1.1 billion consortium bid to rescue the Scandinavian carrier from Chapter 11 bankruptcy protection.
If approved by a US bankruptcy court, a reorganisation plan for SAS will see Air France-KLM become shareholders alongside the Danish government and US investment firm Castlelake.
No timeline has been given for the switch by SAS between global airline alliances.
However, a statement confirming the planned new ownership said: “In parallel to the transaction, and further to its joining of SkyTeam, SAS will seek to establish a commercial co-operation with Air France-KLM and its airlines – subject to customary approvals – to the benefit of Scandinavian customers through increased connectivity.”
The new investment alongside approval of the Scandinavian airline’s ‘SAS Forward’ transformation plan is expected to see it emerge from Chapter 11 bankruptcy protection after more than a year.
The carrier initiated the court-supervised process in the US by voluntarily filing for chapter 11 last July, warning at the time that a strike by 1,000 pilots put the future of the carrier at risk.
Commenting on the new shareholders, chief executive 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.
“Further, 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.”
Benjamin Smith, chief executive of Air France-KLM, which will gain a shareholding of almost 20%, 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 co-operation will allow Air France-KLM to enhance its position in the Nordics and improve connectivity for Scandinavian and European travellers.”