The news broke early this month that SAS had a bankruptcy exit plan that would reshape the airline’s network and partner strategy. Now, one of the five founding members of the Star Alliance will bolt for the open arms of Air France-KLM. I like this move.
The bankruptcy exit plan is somewhat complex, but once the dust settles, Air France-KLM will own 19.9 percent of the company plus some additional convertible debt. (It has an option to acquire more in a couple years.) Denmark will have 25.8 percent of the company plus a lot more convertible debt while Sweden is now out of the company entirely. (Norway got out in 2018.) The rest will be owned by investment funds and some will be held back to distribute to existing creditors. All in, this will bring the airline $1.175 billion in new invested money.
The inclusion of Air France-KLM in the deal means a big shift is coming. This is certainly a notable change for the airline which joined Air Canada, Lufthansa, Thai, and United to form Star Alliance 25 years ago. Everybody remember that iconic gathering of members when it was announced?

Twenty five years in, SAS has realized that being a part of Star isn’t such a big deal. The bigger deal is that SAS is NOT a member of the transatlantic joint venture that includes Air Canada, Lufthansa Group, and United. Instead, SAS has become one of those Star members in limbo — along with LOT Polish, TAP Air Portugal, and others — that are staying in the same hotel as the other guys but aren’t allowed into the club lounge.
Sure there is a benefit to be had by being a member of an alliance, but the real money is in the joint venture, and apparently SAS was just not going to be invited by Lufthansa to join the party despite long-standing rumors that it would eventually buy the airline.
By switching, SAS will be invited to join the Air France-KLM joint venture with Delta and Virgin Atlantic. This is going to be a huge boost for the flailing airline.
Looking at route coverage between the two groups is actually rather interesting. On the surface, Lufthansa Group would appear to be a more appealing choice.
2023 Seat Share From Scandinavia to Outside Scandinavia

Lufthansa Group is larger than Air France-KLM by 50 percent in Scandinavia. Meanwhile, Star provides additional options on other carriers while the rest of SkyTeam is virtually non-existent. But we have to go deeper.
Let’s start with a map showing what European Star Alliance members operate into the three countries.

The ones that really stand out are Lufthansa Group in dark blue, TAP in green, and Turkish in red. It looks like significant coverage of Scandinavia from a variety of hubs, which is great. But then look at SkyTeam.

Best I can tell, Air France-KLM are the only European airlines that serve Scandinavia in SkyTeam. This map looks a lot more anemic… but really… does it?
This past summer, Lufthansa Group served 2 airports in Denmark, 3 in Sweden, and 4 in Norway. Sure, it had a lot of flights, but the spread was fairly concentrated. Meanwhile, Air France-KLM had 3 in both Denmark and Sweden along with 7 in Norway. And it should be noted that Lufthansa Group has 2 airports serving Stockholm whereas Air France-KLM actually has 3 distinct cities it serves in Sweden.
The point is that while Air France-KLM may have less heft in terms of seats, it serves more cities. It’s really not Air France, to be fair. It’s KLM with its Amsterdam hub that does the same thing in Scandinavia it does for smaller towns in the UK. It connects them to the world efficiently.
Of course, actually being welcome to join the transatlantic joint venture makes this far, far better anyway. But you can imagine how this comes together. A combination of the three airlines makes single stop options from around Scandinavia easier when it comes to getting outside Europe. Travelers will be able to go via Amsterdam, Paris to a lesser extent, or Copenhagen.
I assume that with Denmark being the only country remaining invested in the airline, more long-haul will likely shift to Copenhagen from Stockholm. With those three hubs, the joint venture will be able to achieve better coverage through northern Europe, and SAS will be able to actually be seen as a partner instead of a secondary member of an alliance.
This, of course, does not guarantee SAS will be successful. That airline is an absolute mess from years and years of government intervention and bloat. But Chapter 11 will help, and maybe it will eventually become the third large airline in the Air France-KLM (Air France-KLM-SAS?) group. That probably gives SAS a better chance to survive than anything else out there.