It’s been a big year for Scandinavian Airlines System, better known as SAS. The airline has long struggled with poor labor relations, high costs, conflicting priorities between its three state owners (Denmark, Norway, and Sweden), and absence of a joint venture partner over the Atlantic. A founding member of Star Alliance, it was generally assumed that eventually SAS would end up under the Lufthansa Group umbrella, but that did not happen. Instead, it has joined forces with Air France-KLM and that means huge changes are underway.
The catalyst for this recent realignment was yet another insolvency following so, so many years of instability. This time, the plan that came together actually seems like a functional one. Norway had left the airline in 2018, but it wasn’t until this latest round that Sweden bowed out. Denmark opted to stay in the game and inject more money, but it was the 19.9 percent stake acquired by Air France-KLM with the assumption that it will have a controlling stake eventually that really shook things up.
The switch from Star Alliance to SkyTeam happened on Sep 1, and with that came a new codeshare with Delta and the launch of Copenhagen – Atlanta. Seattle follows next summer. SAS is also working to better align its product, bringing back a Eurobiz (blocked middle) class that matches what AF-KL offers. These initiatives are all relatively obvious moves, but there will be a longer term realignment that takes more time.
The goal here is to make Copenhagen into a third connecting airport in the airline’s network. It has already built out Paris/CDG to about what it can handle. (Anyone who has flown through there might disagree that it can even handle that.) Amsterdam remains a great connecting hub, but the government has made it clear that it wants fewer flights, and the pressure has been ratcheting up. Copenhagen provides that opportunity to nicely add a third hub into the mix with a complementary geography which can take pressure off the others.
And Copenhagen really is the story of this whole deal. That’s where the change has started, and it’s where most of the change will likely end up happening. To get a sense of where this is going, I dug into Cirium to see how networks have shifted over the last 20 years. Let’s start with long-haul.
Data via Cirium, red is seasonal, green is new (Seattle and Toronto are summer seasonal, Miami operates in winter only and isn’t on the map)
In 2005, SAS had a long-haul network that was balanced between East and West. But by 2025, that balance will have shifted dramatically. The presence in Asia has shrunk. Even Bangkok which has long ties to the Nordic market is now only seasonal. Instead, all the growth is in the West. Call this the anti-Finnair strategy (you know, before the whole Russia problem changed that).
After shrinking back down to only a handful of cities in the US by 2005, it has now gone back into the West Coast in a big way, added Atlanta along with Boston and Toronto, and has connected more dots. Next summer, JFK – Oslo even starts up for the first time. This marks a real shift, but it’s one that makes sense.
SAS had a long history with Continental and Newark that led it to have nearly all of its service in New York focused on Newark. That continued when United and Continental merged. But now being aligned with Delta and Air France-KLM means it needs to shift more over to JFK where those airlines have their hub.
Perhaps short-haul is where it gets most interesting. Take a look at Copenhagen to start.
Jul data via Cirium, green is new next year
Copenhagen used to be a more balanced East-West hub, but now it has become more North-South. It’s no surprise with Russia being cut off from the network, but it’s really more of a growth story going north and south, including more than a dozen new routes already for next year. There is more flying into smaller cities in other Scandinavian countries in the north, and there is more sun flying in the south. This is more about leisure and visiting friends and relatives traffic.
This kind of move makes good sense when you think about how this hub works in the context of Air France-KLM. It can take traffic from the US and efficiently send it south. Copenhagen is well-positioned for that, especially going southeast. But this also will help increase connectivity within Europe. Now people in places like Bodø can get to much of Europe with a single stop.
When you throw in other somewhat larger cities in Scandinavia that already have decent connectivity on KLM via Amsterdam, this creates a compelling option in terms of frequencies and destinations. It’ll take some time to kickstart the hub through network changes, but the airline is not wasting any time.
Even though Denmark is the big focus, that doesn’t mean Norway and Sweden get ignored completely, at least not yet. This is really about connecting the whole of Scandinavia into the network, and that means remaining relevant to the locals in places like Oslo and Stockholm in some way. So, let’s look at those networks, starting with Norway.
Jul data via Cirium
The Oslo network is kind of funny. It’s as if in 2005 they just left the right half of the map off and fixed it in 2025. If you draw a line from Oslo to Rome, everything west looks pretty much the same. But it has now added a lot more leisure in the south and southeast. If people in Oslo need their sun vacations, SAS makes it easier than it did before. I do wonder how much of that may end up going away over time, however.
Sweden is a more interesting scenario.
Jul data via Cirium
It’s pretty remarkable that SAS didn’t even serve Spain from Sweden in 2005, yet now it serves six cities plus two in Portugal. Again, it’s a leisure play, but the bigger move is a new partnership with BRA, Braathens Regional.
SAS is effectively going to start outsourcing connectivity in Sweden to BRA, so it doesn’t have to handle any of that itself, at least in smaller cities. We’ll see how this one evolves since it’s a new development.
Like I said, there’s a lot more that has to happen here as SAS finds its place in the Air France-KLM/Delta world, but you can already see where this strategy is going. And it’s going fairly quickly.
I’d say the success of this plan relies on untangling and fixing the mess that is labor at SAS, but this is Air France-KLM. Labor peace generally seems optional. Just being a part of this bigger network with a clear charge should help give SAS a chance to become viable for the first time in a long time. Maybe.
