Air France-KLM plots SAS takeover: A calculated push into Europe’s last unconsolidated stronghold
Air France-KLM has launched a takeover bid for Scandinavian airline SAS.
The European airline group plans to raise its stake from the current 19.9% to a controlling stake of 60.5%…
July 4, 2025
Air France-KLM has launched a takeover bid for Scandinavian airline SAS.
The European airline group plans to raise its stake from the current 19.9% to a controlling stake of 60.5% through the purchase of shares owned by Castlelake and Lind Invest.
The transaction is anticipated to finalise in the second half of 2026, pending regulatory approval, and will make SAS a new Air France-KLM subsidiary.
“We are excited by the prospect of fully welcoming SAS into the Air France-KLM family”, said Benjamin Smith, CEO of Air France-KLM. Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline’s potential will continue to grow through deeper integration within the Air France-KLM Group.”
Currently, Air France-KLM owns a 19.9% stake in SAS, having acquired this in late August 2023 during SAS’s Chapter 11 restructuring.
The deal will need to pass regulatory scrutiny, but would see the integration of the SAS fleet, loyalty programme and 10,000 employees into the Air France-KLM group.
A Nordic power play by AF-KLM
Pundits have speculated that the European aerospace market is ripe for more consolidation, but this move by Air France-KLM is very much a Nordic power play.
The Franco-Dutch group, and indeed the whole of SkyTeam, has long been underweight in the Nordics compared to its rivals. Star Alliance, through the Lufthansa group, has a strong presence in the region, and this deal would see a rebalancing of coverage in the north of Europe.
SAS brings a dense short-haul network into the group, particularly to underserved northern and secondary Scandinavian airports where AF-KLM has little to no presence. SAS, as one of the oldest airlines in the world, remains the flagship carrier for the region, with deep local loyalty and a solid frequent flyer base.
Before entering bankruptcy, SAS controlled a dominant share of the Nordic market. In good years, it served 40% of the flights in Sweden and Denmark, while AF-KLM held only single-digit market share across most of the region.
For SAS, integration into the AF-KLM group will give it access to fresh capital, as well as potential cost-saving pathways down the line, such as joint training programmes, pools of spare parts and shared crew planning.
“This operation would benefit our customers and all Scandinavians who would enjoy enhanced connectivity, as well as the SAS teams whose dedication has been key to restore their airline to its rightful place,” Smith added.
The synergies and challenges of the Air France-KLM takeover of SAS
The AF-KLM group flies around 600 aircraft, ranging from Embraer regional jets to Boeing 777s and Airbus A350s. SAS Group, which includes SAS Link and SAS Connect, operates around 130 aircraft, making the new combined fleet over 700 aircraft strong.
Outside of the Bombardier CRJ, all SAS aircraft are already flown by other AF-KLM group members. Even the recently ordered Embraer E195-E2 has already been proven with KLM’s Cityhopper.
For its size, SAS has a robust loyalty programme. The EuroBonus programme has some 8 million members, which will be added to AF-KLM’s Flying Blue’s 20 million, boosting the membership by almost a third.
However, integrating operations, workforce, and IT can be time-consuming and expensive. It’s taken Air France and KLM years to fully cross-pollinate cultures and systems since their 2004 merger.
Beyond that, there will be regulatory hurdles to overcome. Competition authorities could press for concessions such as slot divestments at Stockholm or Copenhagen, or fare caps on short-haul routes.
The minority-to-majority stake pathway is relatively well trodden in Europe. A similar process has been followed for consolidations such as Lufthansa’s integration of ITA. However, every deal undergoes market-by-market assessment, which could throw up roadblocks as the deal progresses.
The Danish state will remain a 26.4% stakeholder, giving it a major say in SAS’s governance. While this preserves national interest, it could potentially complicate the perception of fair competition, especially in a market where SAS has a dominant history.
For Air-France KLM, the acquisition will fill a geographic gap in its network, while for SAS, it marks the start of a new chapter as part of one of Europe’s strongest airline groups.
