Air France-KLM snatches up 20 percent of SAS Airline

Air France-KLM has purchased almost 20 percent of shares of the struggling Scandinavian airline SAS. The completion follows approvals for the deal in Europe and the United States.

The French-Dutch airline combination said last year that they are interested in SAS as part of a rescue operation of the Scandinavian airline. The Danish government and the investment companies Castlelake and Lind Invest have also invested money in SAS. AirFrance-KLM's investment means that the parties are investing a combined total of 1.2 billion dollars in the airline. Air-France-KLM's contribution is 144.5 million dollars.

In addition to the financial transaction, Air France-KLM and SAS have signed an agreement to connect their hubs and networks. These agreements are effective September 1, the same day that SAS will join the Skyteam alliance, which Air France and KLM are founding members of.

Air France-KLM customers will be given access to 33 destinations in Northern Europe, with the exception of SAS hubs in Copenhagen, Oslo, and Stockholm. SAS customers will be given access to 33 European destinations, except Air France-KLM hubs at the Charles de Gaulle Airport in Paris and Schiphol Airport in Amsterdam.

Benjamin Smith, the CEO of Air France-KLM, has said that he is excited by the strategic move, which will increase the airline combination's position in the Scandinavian market.

A condition of the deal is that Air France-KLM could also expand its stake in SAS after at least two years to become a controlling shareholder.