Air France-KLM foresees ‘biggest benefits’ from SAS joining transatlantic JV

Air France-KLM sees SAS’s eventual membership of its transatlantic joint venture as the “biggest benefit” from its investment in the carrier, arguing that the Scandinavian operator has been “held back” from fully capitalising on its strengths. Speaking during the group’s Q3 earnings call on 27 October, Air France-KLM chief executive Ben Smith said the initial benefits from taking a 19.9% stake in the Scandinavian carrier as part of a consortium – a deal which is still subject to regulatory and court approvals – will come from it “switching from Star Alliance to SkyTeam and the commercial relations we can put in place”. But the subsequent step would be for SAS to become part of the transatlantic joint venture between SkyTeam carriers Air France, KLM, Delta Air Lines and Virgin Atlantic, he says. “So we would obviously need anti-trust immunity from the US [Department of Transport] and the equivalent from the European Commission, but that would be the biggest benefit that we see in SAS,” Smith states. Crucially, Smith’s view is that SAS’s operation “completely underperforms from a long-haul perspective” because the carrier is not closer to its alliance stablemates. “The opportunity with a friendlier group, a larger group, which can capitalise on the position we already have [in Scandinavia] and eventually hopefully come into our joint venture should position us to pull and attract traffic from the other two big joint ventures,” he explains. Those two rival joint ventures are the Oneworld-focused grouping, which includes British Airways, American Airlines, Iberia, Aer Lingus and Finnair, and a Star-focused grouping, which includes Lufthansa, United Airlines and Air Canada but not SAS.<br/>