Air France-KLM CEO Benjamin Smith is embracing the latest news on SAS Scandinavian Airlines, which has received U.S. Bankruptcy Court approval for its reorganization plan and now expects to emerge from Chapter 11 in mid-2024. He also outlines the challenges regarding the Olympic Summer Games this year.
SAS joining SkyTeam Alliance
“This is very good news for SAS,” Smith told CEO Talks on the sidelines of the Airlines 4 Europe summit in Brussels. “Things are going exactly as we had hoped. We can’t wait for SAS to become stronger and start building to what it should be, and that’s why we are investing in them.”
When asked about SAS’s switch from Star Alliance to SkyTeam as part of the October 2023 deal in which a consortium including Air France-KLM was selected to partner with SAS, Smith said it is a step-by-step process; we made an investment, and we firmly believe in the future of SAS. “This recent, let’s say big, big, positive result we are very satisfied with, and it’s what we expected,” Smith said.
SAS is a founding member of Star Alliance. When asked which kind of benefits the alliance change for either SAS or Air France-KLM could bring, Smith said alliances are not new. Smith said he wouldn’t expect anything different. “Bringing SAS [into SkyTeam], the alliance is getting bigger, the stronger the airlines are,” Smith said. “This is another positive.”
“There are still some other hurdles we have to get through,” Smith said. “[Including] for SAS to be completely outside of what it has gone through financially. We are a 19.9% shareholder. We try to push the group the best we can.”
Smith said it is also important to ensure the commitments they have made to all the stakeholders. “Anybody who is concerned about what we do or something we shouldn’t be doing, there are a lot of opinions like this [regarding the SAS project],” Smith said.
Regarding SAS joining the Air France, KLM, Delta Air Lines and Virgin Atlantic transatlantic joint venture one day, Smith said it is also too premature.
“They, SAS, made the decision they are going to leave Star Alliance; they have made a decision regarding the new shareholder structure with one government, which is Denmark. They got us and other shareholders. They want to create a much stronger airline based in Scandinavia, and a more global airline to bring benefits there. And they wanted a strategic partner, and that’s us.
Air France-KLM Group CEO Benjamin Smith
The Paris Olympic Challenge
Paris will be in the global focus especially from July 26 until Aug. 11 regarding the summer Olympic Games. "That's exciting“, he said. "Luckily it is not a surprise, we all know that it will be coming for a while. The Olympic Games itself, the infrastructure, road infrastructure, and public transport are a lot of challenges there, but they will be able to do what they want to do. What impacts us are the airport facilities and our ability to operate“, Smith added.
"There are two main challenges for Air France. The first, in a regular year, the carrier is connecting 50% of its customers via Paris Charles de Gaulle. During the Olympics, that should significantly decline and should become much lower. The infrastructure has to switch from connecting customers to origin and destination customers. That puts a lot more pressure on baggage systems, check-in facilities. That's a big challenge and can the airport handle that“.
Air France-KLM Group CEO Benjamin Smith
There will be a lot of oversized baggage for example. The airport has been working on that for a while, passengers can check in at the center of Paris. The second topic for Air France will be, “how we make sure that our crews, pilots, ground staff, cabin crew can make it to work (on time). It is one thing to have everything ready, but what happens if the roads are jammed, or there are difficulties in getting ready to work“, he said.
Air France booked a number of hotel rooms, as for some maybe it is too risky for their movement in traffic patterns in Paris and would be better to stay the night before in a hotel. "The city is sold out, we have done this a long time ago“, Smith added.