Airline Alliances: What SAS leaving Star Alliance Means for the Industry

In the ever-evolving world of air travel, airline alliances have emerged as game-changers, revolutionizing the way passengers experience the skies. In this article, we will delve into the intricacies of airline alliances, how they function, and the myriad benefits they offer to travelers. Additionally, we will explore recent developments that highlight the dynamic nature of these partnerships, as Scandinavian Airlines System (SAS) embarks on a transformative journe .

Understanding Airline Alliances

At their core, airline alliances are strategic partnerships formed between multiple airlines. These alliances enable member carriers to collaborate closely, pool resources, and provide passengers with a broader range of destinations, services, and seamless travel experiences than any individual airline could achieve alone. Currently, there are three major global airline alliances:

  1. Star Alliance: Founded in 1997, the Star Alliance is the largest and oldest global alliance, comprising 26 member airlines, including United Airlines, Lufthansa, and Air Canada. Together, they serve over 1,300 destinations in more than 190 countries
  2. Oneworld: Oneworld, established in 1999, consists of 14 member airlines, including American Airlines, British Airways, and Cathay Pacific. Collectively, they offer access to approximately 1,000 destinations in over 170 countries.
  3. SkyTeam: Established in 2000, SkyTeam comprises 19 member airlines, including Delta Air Lines, Air France, and Korean Air. The alliance provides access to more than 1,000 destinations spanning 170 countries.

The Benefits for Travelers

Airline alliances offer a treasure trove of advantages for travelers, making the journey smoother, more cost-effective, and packed with possibilities:

Global Connectivity: The hallmark of airline alliances is their extensive network. Passengers can seamlessly connect to a multitude of destinations worldwide by utilizing flights operated by different member airlines within the same alliance.

Streamlined Transfers: Travelers benefit from streamlined transfers, with aligned baggage handling and check-in processes between alliance members. This reduces the hassle of switching airlines during a journey.

Frequent Flyer Programs: Alliance members typically recognize each other’s frequent flyer programs. This means you can earn and redeem miles across various airlines within the same alliance

Airport Lounge Access: Depending on your ticket class or frequent flyer status, you may enjoy access to the airport lounges of alliance member airlines during layovers, enhancing your travel experience.

Code-Sharing: Airlines often code-share on routes, enabling passengers to book a single ticket for a journey that involves multiple carriers. This simplifies booking and ticketing processes, reducing complexity for travelers.

Shared Services: Beyond passenger services, alliance members may collaborate on various operational aspects, such as maintenance, ground handling, and technical expertise. This contributes to safer, more efficient, and cost-effective travel.

Coordinated Schedules: Airlines within an alliance often coordinate schedules to minimize wait times during layovers, providing passengers with more efficient and timely connections.

Increased Flight Frequency: Travelers benefit from more options and higher flight frequencies to popular destinations due to the combined schedules of alliance members.

SAS Joins SkyTeam: A Transformative Shift

In October 2023, Scandinavian Airlines System (SAS) made a groundbreaking announcement that reverberated throughout the aviation industry. The airline, which had long been a founding member of the Star Alliance, revealed its decision to exit this prestigious group and embrace a new chapter as a member of the SkyTeam alliance. This strategic move marks a transformative shift in SAS’s international partnerships, with far-reaching implications for both the airline and travelers.

Credits: Bene Riobó

SAS had been under the financial strain of Chapter 11 bankruptcy protection since July 2022. During this challenging period, the airline sought avenues to secure its future and emerge stronger. The winning bid, a consortium led by Air France KLM and featuring financial firms Castlelake and Lind Invest, along with support from the Danish government, injected a total of $1.175 billion into SAS. This investment included a combination of equity, convertible debt, and funds to refinance existing debts.

Air France KLM’s pivotal role in this consortium signaled its commitment to strengthening its position in the Nordic region. SAS offers a well-established presence in Scandinavia and boasts a strong brand reputation. The alliance brings both opportunities and challenges as SAS restructures itself to align with the Air France and KLM operations.

The Way Ahead

SAS’s decision to leave the Star Alliance underscores the fluid nature of airline alliances in today’s aviation landscape. As SAS embarks on this transformative journey, the aviation industry watches with keen interest. The shift of a founding member from one alliance to another heralds a new era of competition among airlines. Furthermore, this strategic move by SAS may inspire other flag carriers to explore similar realignments within the alliance framework.

Air France – KLM’s acquisition of SAS gives them access to Scandinavian markets. Credits: DemonDays64

The aviation world eagerly anticipates the benefits and challenges that lie ahead as SAS prepares to integrate with SkyTeam. Passengers originating in Scandinavia can expect easier access to destinations in the Middle East, Asia, South America, and North America. The second quarter of 2024 is the target for finalizing this transition. As the date approaches, the industry is poised for a redefined airline alliance landscape.


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