SAS CEO pushes to affix Air France, KLM and Delta transatlantic pact

Ask Scandinavian Airways CEO Anko van der Werff in regards to the provider’s community technique, and he’ll reply with a riddle.

“Somebody’s on the North Pole and takes a step to the appropriate, what path are they touring?” he quipped in an unique interview with TPG. “Everyone thinks it is east however, after all, it is south as a result of if you’re on the literal North Pole and, nicely, every thing is south.”

The identical is true for SAS. With hubs at Copenhagen Airport (CPH) in Denmark, Oslo Airport (OSL) in Norway and Stockholm Arlanda Airport (ARN) in Sweden, every thing for the airline is south.

That’s the reason SAS is investing in its hub at CPH — its sole “international hub,” in keeping with its most up-to-date annual report — and increasing hyperlinks with its new minority proprietor, the Air France-KLM Group, and its companions, together with Delta Air Traces and Korean Air.

The result’s one thing of a neo-Viking pressure. Since rising from chapter in 2024, SAS has unveiled quite a few product enhancements, from the return of enterprise class on short-haul flights to high-speed inflight Wi-Fi from SpaceX’s Starlink. It has additionally added at the very least six new intercontinental routes to locations like Hartsfield-Jackson Atlanta Worldwide Airport (ATL), Seattle-Tacoma Worldwide Airport (SEA) and Seoul, South Korea’s Incheon Worldwide Airport (ICN) and ordered at the very least 45 new Embraer E195-E2 jets to assist its development in Europe.

“We are able to carry the north to the desk,” van der Werff stated. “We strengthen the Air France-KLM Group that method.”

The Paris-based group owns practically a fifth of SAS right now and is within the means of elevating that stake to 60.5% by the tip of 2026.

Becoming a member of Air France, KLM and Delta throughout the North Atlantic

“I am wired in direction of joint ventures,” van der Werff stated on SAS’s long-haul technique.

That’s not a shock. Van der Werff was chief business officer at Aeromexico when the provider applied its three way partnership with Delta in 2016, and earlier than that, he held numerous roles at KLM, an airline whose involvement in a transatlantic three way partnership dates to 1993 and Northwest Airways, which has since been acquired by and assimilated into Delta within the 2000s. The immunized tie-ups enable airways to coordinate every thing from schedules and fares to share revenues and prices, plus collectively promote their companions’ flights.

Integrating SAS into Air France and KLM’s transatlantic pact with Delta and Virgin Atlantic might enormously profit the airline, permitting every thing from increasing its gross sales attain to Delta’s huge loyalty base within the U.S. to feeding extra vacationers into its CPH hub. However whereas becoming a member of the three way partnership is close to the highest of van der Werff’s to-do checklist, it’s not one thing he can do alone.

“I believe we should always actually begin quickly,” he stated, noting that talks to incorporate SAS within the three way partnership haven’t begun.

“It is one thing all of us consider in, however, hey, regulatory approval processes, let’s examine additionally when to proceed with that,” van der Werff continued.

Van der Werff’s feedback come as opponents are already shifting to broaden their joint ventures. The Lufthansa Group in September utilized to the U.S. Division of Transportation to incorporate Italy’s ITA Airways in its transatlantic pact with Air Canada and United Airways.

British Airways and Iberia proprietor Worldwide Airways Group is eyeing an funding in TAP Air Portugal whereas additionally accelerating natural development at its personal airways.

Air France and KLM, based mostly on public statements, seem centered on rising their possession stake in SAS first earlier than continuing with business tie-ups.

“This new step would enable Air France-KLM and SAS to completely unlock their synergy potential through a complete integration in all areas of enterprise, together with loyalty, and would lengthen past business actions,” the group stated in July.

Copenhagen: Europe’s subsequent huge hub?

One in all SAS’ weakest factors has lengthy been its three northern hubs serving 20-plus million individuals unfold over a area bigger than Texas. The outcome has been three undersized hubs and duplicative long-haul routes in an period when hub measurement and scale matter.

Van der Werff set about altering that since he took the helm of SAS in 2021.

Seats at CPH, the airline’s most southerly hub, are up 38% this yr in comparison with 2023, when Air France and KLM introduced their funding in SAS, in keeping with schedule knowledge from aviation analytics agency Cirium. Seats at SAS’ different two hubs, ARN and OSL, are up 12% and down 2%, respectively.

SAS’s shift towards CPH is extra dramatic for intercontinental flights. Excluding Europe, seats from CPH are up 30% in comparison with a 51% drop at ARN and a 2% drop at OSL, Cirium schedules present.

“Norway and Sweden [are] actually essential and we’re clearly creating our markets there however, if you happen to begin with the wide-bodies, it makes plenty of sense to centralize them in a single central level and actually begin competing with the likes of Heathrow, Frankfurt, Paris and Amsterdam,” van der Werff stated. “There’s plenty of visitors that is being sucked out of our community and goes south.”

Regardless of the latest capability shifts, SAS’ CPH hub stays a lot smaller than any of the competing hubs van der Werff talked about. The airline is scheduled to fly 7.9 million seats from the Danish capital this yr in comparison with 24.5 million on British Airways from London’s Heathrow Airport (LHR) or 22.6 million on Air France from Paris-Charles de Gaulle Airport (CDG), Cirium schedule knowledge reveals.

A bigger CPH hub additionally fits Air France and KLM. The Dutch authorities needs to cut back the variety of flights allowed at Amsterdam Airport Schiphol (AMS), the group’s second-largest hub by seats, within the identify of noise. CPH might act as a development valve for the group if flight numbers are minimize at AMS.

No phrase but from van der Werff on any new U.S. routes in 2026; he declined to touch upon that subject. On the intercontinental entrance, SAS has introduced new service to Chhatrapati Shivaji Maharaj Worldwide Airport (BOM) in Mumbai, India, and Ben Gurion Airport (TLV) in Tel Aviv subsequent yr.

SAS ‘under-indexed’ on long-haul planes

One problem SAS faces in rising its CPH hub is the supply of planes. The airline ordered as much as 55 Embraer E195-E2 jets in July to develop its European community, however with simply 15 intercontinental-capable plane, van der Werff described it as “under-indexed on long-haul plane.”

SAS’ long-haul fleet contains 12 twin-aisle planes — eight Airbus A330-300s and 4 Airbus A350-900s — and three Airbus A321LRs.

The airline has orders for simply two extra A350s, with each due in 2026. After that, there are not any extra new wide-bodies coming.

“I want to see a [campaign] with Boeing and Airbus on additional improvement of our wide-body, long-haul fleet,” van der Werff stated. “I do not suppose we have maxed out but.”

Getting extra twin-aisle planes could possibly be powerful. The backlog for wide-bodies on the main planemakers, Airbus and Boeing, stretches into the 2030s, leaving airways with out present orders with restricted choices.

Aengus Kelly, CEO of the world’s largest plane leasing firm AerCap, on Wednesday described the marketplace for new wide-bodies as “extraordinarily acute” by way of demand outstripping provide.

SAS might doubtlessly faucet into the Air France and KLM orderbook as soon as it’s a extra built-in a part of the group. Air France and KLM collectively had orders for 53 Airbus A350s and three Boeing 787s on the finish of June, its newest fleet plan reveals.

As for the favored long-range, single-aisle Airbus A321XLR, van der Werff stated he doesn’t see the airplane as doing far more for SAS than the A321LR.

To maintain EuroBonus or be part of Flying Blue

One query nagging SAS loyalists (and actually anybody within the factors and miles world) is the way forward for the provider’s loyalty program, EuroBonus. This system has 8.5 million members and deep ties in Scandinavia, together with with the area’s largest resort operator, Scandic.

Van der Werff was clear that no modifications to EuroBonus are imminent. SAS wants European Fee approval of Air France and KLM’s majority funding within the airline earlier than any speak of integration with the group’s Flying Blue loyalty program can start.

“The place I am pondering, a reputation change sooner or later the place the loyalty and the loyalty factors, and all of the tier advantages and every thing else, stays with us and stays the identical, however possibly there is a identify change and thru which you could possibly draw possibly all types of different synergies and be a part of higher offers as a part of the household. I believe we should always discover that,” he stated.

Till then, SAS plans to maintain doing what it is doing. Meaning rising at CPH, together with with 40% extra seats this winter than final, persevering with to woo premium flyers by enhancing its product, from the meals to the Wi-Fi, and constructing on the ties it’s forging with Air France, KLM and their companions.

However one factor is not going to change at SAS, regardless of who owns a controlling share or what three way partnership the airline is in.

“We’re Scandinavian,” van der Werff stated.

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