Summary
- The future of the SAS Eurobonus loyalty program is looking like it will be merged into Air France-KLM’s Flying Blue program.
- Securing approvals from creditors and anti-competition rulings from the European Commission will be key hurdles for the merger to happen.
- If successful, Air France-KLM’s control of SAS will make it Europe’s second-largest airline group, increasing passenger traffic and opening new opportunities for transatlantic travel.
When a consortium including the Air France-KLM Group purchased 19.9% of Scandinavian Airlines (SAS) in October, all eyes quickly turned to SAS’ membership in the Star Alliance and the future of the Eurobonus loyalty program. Reports this week have confirmed that the future of the program is increasingly looking like it will be merged into Flying Blue, with the date coming as soon as 2024.
In the plans
First reported by DN, and seen in Realtid, the Eurobonus program is listed as collateral in the loan documents for the purchase of 19.9% in SAS. This isn’t surprising given how valuable frequent flyer programs are, becoming the basis for multi-billion dollar credit lines in recent years. As part of the loan conditions, it states, “[SAS] shall facilitate a merger of the loyalty programs between SAS and Air France-KLM (Eurobonus/Flying Blue) at any time after Air France-KLM secures more than 50 percent of the outstanding shares.”
While SAS Chairman Carsten Dilling previously said that Eurobonus’ future as an independent program was still undecided, these documents make it clear that the goal is to integrate the program into Flying Blue. However, there are still some key hurdles before that comes to fruition.
Photo: Christian Heinz / Shutterstock
The key financial and regulatory hurdle will be securing approvals from all creditors and anti-competition rulings from the European Commission. This won’t be easy and even if it does happen, AF-KLM will have to own 50% of Eurobonus’ shares before thinking of a merger. Assuming this does occur, there’s also the process of withdrawing from the Star Alliance, serving out a notice period, joining SkyTeam, and then merging the two frequent flyer programs.
It sounds like a long-winded task, but DN predicts that the alliance swap will occur in 2024 itself, meaning the Flying Blue-Eurobonus merger might be around the corner itself. However, nothing is settled yet, and keep an eye out as this process carries on.
Simple Flying has reached out to both Air France-KLM and SAS for comment and will update this article once one is available.
Huge step forward for AF-KLM (and Flying Blue)
If successful, controlling SAS will allow Air France-KLM to become Europe’s second-largest airline group. According to Eurocontrol, Ryanair leads the market with a 10% market share, followed closely by AF-KLM at 6.5% combined. Add in SAS and this figure jumps to 8.5%, beating out the likes of the Lufthansa Group (7%) and IAG (4.5%).
From a footprint perspective, the French-Dutch group will have a stronghold in Northern Europe, increasing passenger traffic and opening new transatlantic opportunities across the board. This will be a big loss for the Star Alliance, which already struggles with an absence in the UK, and add another feather in the cap for SkyTeam elites, allowing them access to more inventory within Europe and far beyond.
Photo: Omar F Martinez | Shutterstock
What do you think about Air France-KLM’s plans for its loyalty program and SAS’ Eurobonus? Let us know in the comments.