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

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

“Somebody’s on the North Pole and takes a step to the fitting, what route are they touring?” he quipped in an unique interview with TPG. “All people thinks it is east however, after all, it is south as a result of if you’re on the literal North Pole and, properly, all the pieces 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, all the pieces for the airline is south.

That’s the reason SAS is investing in its hub at CPH — its sole “world hub,” in line 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 power. 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 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 least 45 new Embraer E195-E2 jets to help its progress in Europe.

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

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

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

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

That’s not a shock. Van der Werff was chief industrial officer at Aeromexico when the service carried out 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 permit airways to coordinate all the pieces 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 may significantly profit the airline, permitting all the pieces 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 listing, it’s not one thing he can do alone.

“I feel we must 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 have a look at additionally when to proceed with that,” van der Werff continued.

Van der Werff’s feedback come as opponents are already transferring 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 progress at its personal airways.

Air France and KLM, primarily based on public statements, seem targeted on growing their possession stake in SAS first earlier than continuing with industrial tie-ups.

“This new step would permit 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 prolong past industrial actions,” the group stated in July.

Copenhagen: Europe’s subsequent huge hub?

Considered one of SAS’ weakest factors has lengthy been its three northern hubs serving 20-plus million folks unfold over a area bigger than Texas. The end result 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 12 months in comparison with 2023, when Air France and KLM introduced their funding in SAS, in line with schedule information 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] really vital and we’re clearly growing our markets there however, when you begin with the wide-bodies, it makes loads 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 loads of visitors that is being sucked out of our community and goes south.”

Regardless of the current 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 12 months 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 information exhibits.

A bigger CPH hub additionally fits Air France and KLM. The Dutch authorities desires 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 may act as a progress valve for the group if flight numbers are lower 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 12 months.

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 aren’t 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 assume we have maxed out but.”

Getting extra twin-aisle planes might be robust. The backlog for wide-bodies on the main planemakers, Airbus and Boeing, stretches into the 2030s, leaving airways with out current 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” when it comes to demand outstripping provide.

SAS may probably 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 exhibits.

As for the favored long-range, single-aisle Airbus A321XLR, van der Werff stated he doesn’t see the airplane as doing way 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 service’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 adjustments to EuroBonus are imminent. SAS wants European Fee approval of Air France and KLM’s majority funding within the airline earlier than any discuss of integration with the group’s Flying Blue loyalty program can start.

“The place I am pondering, a reputation change in some unspecified time in the future the place the loyalty and the loyalty factors, and all of the tier advantages and all the pieces else, stays with us and stays the identical, however possibly there is a identify change and thru which you might draw possibly all kinds of different synergies and be a part of higher offers as a part of the household. I feel we must always discover that,” he stated.

Till then, SAS plans to maintain doing what it is doing. Which means rising at CPH, together with with 40% extra seats this winter than final, persevering with to woo premium flyers by bettering 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 won’t 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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