SAS has announced it reached a significant milestone in its ongoing Chapter 11 process.
Air France-KLM will take a stake in the carrier as part of the airline’s bid towards reorganising and emerging in better shape.
Labelled as a surprise by analysts and enthusiasts, Air France-KLM will take precisely a one-fifth stake in the ownership group.
Despite being a founding member of Star Alliance in 1997, SAS will also depart Star Alliance and join SkyTeam, where Air France-KLM is located.
Subject to regulator approval, the new look SAS would see Castlelake Investment Fund take the most significant chunk of ownership at 32%. The Danish Government would be at 25.8%, followed by Air France-KLM at 19.9% and Lind Invest at 8.6%.
SAS filed for bankruptcy protection, chapter 11, in 2022 and has since been finding ways to acquire more funding, streamline, and generally reorganise critical elements of the business. However, funding was one of the most integral elements of this.
This is the latest step in the ongoing SAS Forward Plan, a plan launched to turn around the company and reach the ambitions laid out over time.
This is a significant achievement of our transformation plan, SAS FORWARD. We have carried out a broad, competitive and thoroughly evaluated equity solicitation process, and we are confident that the selected bid is the most favourable for SAS, its creditors and other stakeholders. Securing new capital is one of the key pillars in the SAS FORWARD plan and will provide a strong financial foundation to help drive our airline forward and facilitate our emergence from the U.S. chapter 11 process. While there is still work remaining, I am pleased to see the great progress we are making to be a competitive and financially strong company.Carsten Dilling, Chairman of the Board of SAS
While developments surrounding SAS securing a likely long-term pathway out of Chapter 11 and the winning consortium are great, Industry experts, alongside general observers, are already plotting how the entry of Air France-KLM will impact SAS.
Some have speculated that the alliance change could play a role in adjusting route strategies for all three carriers, among many more changes to come.