Air France-Klm and the Sas deal: how European flights and scenarios will change
The consolidation of European air transport continues unabated: an "air-market" that, after the pandemic, is split between acquisitions and [...]
Scandinavian Airlines (SAS)
KLM
Air France
The consolidation of European air transport continues unabated: an "air-market" that, after the pandemic, is divided between acquisitions and mergers and that aims at the creation of 4-5 large groups controlling most of the traffic. A phenomenon that traces what has happened in the past few years in the U.S., where the 75% of the routes is controlled by the three sisters American, Delta and United plus Southwest Airlines.
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Waiting to see in 2024 who will try to acquire Tap Air Portugal; in the meantime. Lufthansa is trying (not without difficulty) to take over part of Ita Airways, Iberia (Iag holding company along with British) awaits the go-ahead to incorporate Air Europa; and Air France-Klm in a surprise move. entered the capital of Scandinavian Sas..
What to expect from Sas's transition to Skyteam
Two weeks ago, in fact, Sas announced its "rescue"-after the crisis and to complete its restructuring plan-which sees a consortium controlling its share capital. The consortium consists of the fund Castlelake, the Danish state and the Air France-Klm Group.. The latter will control 19.9% of the airline's shares, but it is not ruled out that the Franco-Dutch may over time increase the percentage of control.
Meanwhile, however, 20% was enough for the following to be announced at Sas the abandonment of the Star Alliance (headed by Lufthansa) and the upcoming move to Skyteam (the alliance led in Europe by AF-KLM).
A very relevant novelty in the landscape of flights, connections, lounges and services to frequent flyers because it partially compensates Skyteam for the loss of two carriers: Air Europa, which is expected to move to oneworld, an alliance to which Iag belongs; and Ita (which inherited Skyteam membership from Alitalia), which is expected to move to Star Alliance.
Not only that, in this way Air France-Klm puts a major flag in northern European market in terms of passengers, and airport hubs, and effectively wrests a slice of the market from Lufthansa's control.
A market, the northern European one, made up of frequent travelers with a high spending capacity who love long-haul destinations. As a result, Skyteam-and by extension Air France-Klm-can count on a nice package of customers who will Move throughout the year on different seasonality that will be able to connect via Paris and Amsterdam to the many destinations served around the world. Finally, Lufthansa-and Star Alliance-will have more difficulty diverting passengers from Sweden, Denmark and Norway to the German hubs of Frankfurt and Munich.
The value of Sas in Europe
For the record, from November 2022 until September 2023. Sas carried 21.5 million passengers. While in all of 2022, the airline had carried nearly 18 million passengers, followed by Norwegian with 17.8 million pax.
In the same year, the other two airlines for sale. Tap Portugal and Ita Airways recorded 13.5 million and just over 10 million passengers, respectively. Also around 10 million pax is the number achieved by Air Europa in 2022.
These figures show how strategic and relevant Sas's "weight" is in shaping new alliances and networks within the European landscape compared to other carriers that are already in the process of acquisition and/or sale. Not to mention that, until two weeks ago, Air France-Klm itself was the favored to take over majority stake in Tap Air Portugal.
The Amsterdam effect
Added to this is another no less important detail. It is becoming increasingly difficult for KLM to sustain the Number of flights at its hub in Amsterdam Schiphol.
The recent laws passed by the Dutch government on the slot limitation available at the capital's airport, the increased eco-tax on flights, and the impact of the Overcrowding at Schiphol Airport. during summer peaks, could lead the Franco-Dutch grupo to find alternative solutions to ensure connectivity to meet high travel demand.
Sas - with its three hubs in Stockholm, Copenhagen and Oslo - could come to the rescue of the "cap" imposed by the Netherlands on Klm by hosting a number of international flights that would be easily and quickly connected to Amsterdam.
