The Scandinavian airline, SAS, will become a subsidiary of the Franco-Dutch airline, Air France-KLM. As announced in Paris on Friday (04JUL25), the latter will increase its minority stake in SAS from the current 19.9% to 60.5%. The transaction is expected to be completed in the second half of 2026.
At the same time, Portugal’s state carrier, TAP, is about to be partially privatized. The government in Lisbon has decided to sell 49% of the airline.
Spanish Air Europa is also up for sale, to which the owner family, Hidalgo, has attached a price tag of EUR 1 billion.
The consolidation wheel in European aviation is spinning faster than ever. This is demonstrated by the latest developments at SAS and the imminent partial sale of TAP, as well as the haggling over the sale price of Spanish Air Europa. In the end, alongside independent low-cost airlines such as Ryanair or Wizz Air, there will be three large groups that will be able to compete globally with U.S. and Far Eastern competitors for passengers and air freight.
SAS is on the upswing
Firstly, the acquisition of SAS by Air France-KLM: In summer 2024, the Franco-Dutch carrier acquired a minority stake in SAS, which had been hit hard by the Covid pandemic and was under severe pressure on its domestic market. An extended codeshare and distribution agreement was agreed. This cooperation was later deepened when SAS joined the SkyTeam alliance. According to the Air France-KLM Executive Board, the now announced acquisition of the majority stake is spurred by the significant improvement of SAS’s latest financial and operational performance, the success of the commercial cooperation that commenced in mid-2024, as well as the Group’s confidence in the Scandinavian carrier’s long-term potential.
Denmark retains a blocking minority
Through the acquisition, SAS will become a subsidiary of the Air France-KLM Group. It will allow Air France-KLM and SAS to fully unlock their synergy potential via a comprehensive integration in all areas of business, including its loyalty program, and will extend beyond commercial activities, emphasized Benjamin Smith, CEO of Air France-KLM. The Franco-Dutch Group will hold the majority of seats on the Nordic airline’s Board of Directors. The sellers of the shares are the capital investor Castlelake (32%) and Lind Invest (8.6%). The Danish state remains on board SAS with a 26.4% stake. The amount paid by Air France-KLM was not disclosed.
The battle for TAP has begun
Meanwhile in Lisbon, 1,750 km south of Paris, the privatization of TAP, which has been under discussion for several years, has gained momentum. The parliamentary groups of the right-wing nationalist Portuguese party, Chega, and the Socialists have agreed to sell 49% of the shares in the state-owned airline. In doing so, they are opposing plans to sell the majority stake in TAP as favored by the previous government. The airline is of particular interest to investors due to its dense network between the Iberian Peninsula and Brazil, its most important market outside Europe.
According to reports in Diário de Notícias, the government is keen to attract a strategic partner capable of driving TAP’s long-term growth and sustainability roadmap, while ensuring that Lisbon remains a major transcontinental hub. Portugal’s policymakers also demand that the airline’s headquarters and hub remain in Lisbon to safeguard the country’s strategic connectivity and existing jobs. Since Madrid-based Iberia already belongs to the IAG Group, market experts believe that British Airways and Co. have little chance of buying into TAP. So, everything points to a bidding war between Air France-KLM and Lufthansa, as both have clearly signaled their interest in the Portuguese carrier.
The price tag is EUR 1,000,000,000 (sic!)
This could also be the case with Spain’s Air Europa (IATA: UX). Although the IAG Group holds 20% in the airline, the EU competition watchdogs have prohibited IAG from taking a majority stake. The group would otherwise have a quasi-monopoly on the Spanish passenger and cargo market, argues Brussels. According to information obtained by CargoForwarder Global from internal circles, Air France-KLM has signaled its intention to buy the Spanish company for a price of between EUR 775 million and 800 million. Lufthansa, for its part, is said to have offered EUR 800 million for the takeover. The Hidalgo family, however, is insisting on EUR one billion.
The carrier is coveted because it operates a dense route network to Latin America, mostly to leisure destinations. But one thing can already be predicted with a high degree of certainty: If Lufthansa joins TAP, its chances with Air Europa are likely to be close to zero. Conversely, the same applies to Air France-KLM.
