A new chapter for Scandinavian Airlines

SAS leaving Star Alliance, joining SkyTeam

Michael Kleiner
Business & Sports Editor
The Norwegian American

In spring 2020, Scandinavian Airlines System (SAS) was healthy, on the rise: market shares; more people flying; customer satisfaction. COVID-19 then engulfed the world.

On an April 8, 2020 webinar, “Immediate Impact of COVID-19 on Norwegian-American Businesses,” Max Knaggle, general manager, SAS Americas, informed that 11,000 employees had been furloughed and all flights between the United States and Scandinavia and most international flights were canceled.

The longer the pandemic lasted, the worse it got for the airline industry. SAS, which was established in August 1946, flew its first flight to America on Sept. 17, 1946, and was Airline of the Year in 1984, entered Chapter 11 bankruptcy in July 2022.

“The airline industry is very susceptible to external forces,” said Jasmin Utter, SAS general manager, Region Americas, in a June 4 webinar, “SAS: A New Chapter,” hosted by NorCham USA, its first event. “It tends to be significantly impacted and quite rapidly. We’ve seen some significant impacts in the past from 9/11, SARS, H1N1,  but nothing really prepared us for COVID. COVID was an extreme.”

Four years later, the level of recovery in the industry varies. The United States traffic has exceeded 2019 flights, but many countries have not fully recovered.

Utter discussed the bankruptcy, but offered an upbeat message about the “new SAS,” for business customers.

Debt and bankruptcy

“We decided to file for Chapter 11, not because of a cash flow situation, but because we had taken on debt in order to survive,” explained Utter. “Debt will at some point have to be paid back. One of the first milestones was the renegotiation of most of our agreements.” [Jan. 2023]

In October, 2023, a consortium of four investors won the bidding to become new owners: prime owner American company Castlelake, followed by Danish state, Air France/KLM, and Danish company Lind Invest. In March, the U.S. District Court for Southern District of New York approved SAS’ Chapter 11 plan. They will likely exit Chapter 11 this summer.

Corporate customers

In mid-June, benefits were added to SAS’ corporate program SAS for Work: discounts to SAS’ over 130 destinations to, from, and within Scandinavia; free seat selection when traveling in SAS Business or SAS Plus; free name changes on tickets.  Continuing is Fast Track, which provides lounge access and priority boarding for those traveling in Business and Plus. Points can be earned in the loyalty program, SAS EuroBonus, which has  more than 7 million members.

“This will be applicable to all who travel for work and for companies of any size,” Utter said.

Network

Customers care most about where they can fly to and from. SAS transports more than 65,000 passengers a day on more than 800 daily departures, covering more than 280 routes, with a fleet of 130 aircraft.

In addition to Air France/KLM, SAS has entered into a collaboration agreement with Delta Airlines and switched their loyalty program from Star Alliance to SkyTeam, effective Sept. 1. This will open up Delta’s Atlanta hub to connections with other Delta destinations.

“Atlanta [Hartsfield-Jackson Atlanta International Airport] is the biggest airport in the United States, if not the world,” said Utter.  “It’s very efficient. It’s a very good airport to transfer in. It’s also an airport that covers 80 percent of the U.S. population within a two-hour flight. It’s a good addition to our network. We expect an even stronger collaboration with Delta moving forward.”

Copenhagen will be the destination from Atlanta (daily); JFK-New York (twice daily); Boston, Los Angeles, and Orlando (daily); San Francisco and Washington D.C.’s Dulles (six times weekly); Chicago O’Hare (five times weekly); Toronto (daily in summer); and Miami (five times weekly October to April).

There are three weekly flights from Toronto to Stockholm and two weekly from Miami. Newark, N.J., will continue to have daily departures to Oslo, Copenhagen, and Stockholm.

Utter was asked about the possibility of SAS touching down in Houston, Minneapolis,  and Seattle.

“We tried Houston a few years ago, and it didn’t do well enough for us to continue that route,” said Utter. “We’re always evaluating what to do next [regarding Minneapolis and/or Seattle]. You could fly on Delta from Minneapolis to a connecting point and then travel with us from there.”

Collaboration with Delta

Customers will not notice the change from Star Alliance to  SkyTeam. Utter explained: “Your bonus is SAS’ loyalty program not Star Alliance’s,” explained Utter. “Any tier level that you have today will remain unchanged when we shift over to SkyTeam.

“You will be recognized as members and you will bring all your accrued points. You will be able to enjoy the same benefits, a global network of 19 airlines that cover most of the world.

“It is possible to book flights in combination with Delta Airlines. You will be able to use the SAS app. In a few months’ time, we expect to be able to announce a more comprehensive collaboration with Delta. As of now,  it is possible to travel with them and then connect with us.”

Business lounges

Utter was excited to share news about business lounges. Right now, SAS has their own lounges in Scandinavia, Chicago, and Newark. They share with Delta (Atlanta, as of Sept. 1);  Lufthansa (Boston, currently JFK, D.C.); Star Alliance (Los Angeles); United Airlines Club Lounge (San Francisco); Air Canada Maple Leaf Lounge (Toronto). SAS will be changing terminals at JFK, where they can use Air France/KLM Lounge. Turkish Airlines Lounge can also be used in D.C.

“The ambition is to be able to offer lounges at every airport that we fly from,” said Utter.

Sustainability

The efforts toward sustainability are wide ranging and ambitious affecting the airfleet, interior and exterior of the planes, fuel, customer offerings. SAS has switched from Boeing to newer versions of Airbus aircraft, which have significantly less emissions by 30% and provide a better customer experience.

Everything on the interior of the aircraft has been reviewed–”down to the swivel sticks.”

Carpeting is made of sustainable materials, 30% lighter than the previous carpets. Carpeting and upholstery are cleaned with sustainable detergent. The exterior of the planes are being cleaned with less water.

Magazines and items from the tax-free shop have been eliminated because it makes the plane heavier.

Food choices include healthy and organic options sourced from local farms and dairies.

“We are working toward the industry goal of achieving zero emissions by 2050,” said Utter. “Being an airline, the vast majority of our emissions come from our operations. We have therefore invested in a new fleet. As a consequence, we have one of the youngest and most modern fleets of all European carriers.”

The airline also attempts to use Sustainable Aviation Fuel (SAF) when possible. It is scarce so it is three to four times more expensive than normal jet fuel. The Biden Administration’s Inflation Reduction Act is providing incentives for producing SAF in the United States.

“Not only does it reduce emissions by up to 80% of its life cycle but it has the same structure as fossil fuel, meaning we don’t need to change infrastructure,” Utter said.

At the same time, SAS is investigating producing synthetic aviation fuel, “to facilitate the transition,” and using hydrogen-fueled planes for long trips.

“We announced some months ago a collaboration between SAS, Airbus, the Swedish airport authority Swedavia, the Norwegian contingent Avinor and the Swedish energy company Vattenfall with the aim of investigating the feasibility of infrastructure for hydrogen-fueled aircraft at airports in Norway and Sweden,” Utter said. “The feasibility study covers two countries and over 50 airports.”

Through a collaboration with the Swedish company Heart Aerospace,  SAS anticipates using small electric aircraft for travel within Scandinavia by 2028,

They’re also offering a corporate sustainability program where SAS purchases SAF on the employees’ behalf. Since it’s directly buying SAF, SAS doesn’t earn anything. The passenger and company earns credit toward their sustainability efforts.

“We provide documentation of the investment,” she said. “We also offer a ticket type called BIO that includes about 50% SAF blend-in. There is also a Travel Pass solution with a punch card that includes about 50% biofuel. SAF can be purchased on our webpage in blocks of 20 minutes. All solutions will help corporate customers and travelers reduce their scope 3 emissions.”

This article originally appeared in the July 2024 issue of The Norwegian American.