Chief executive of Scandinavian operator SAS, Anko van der Werff, does not expect any issues with securing European Commission approval for Air France-KLM’s planned minority investment in the carrier.
Air France-KLM is taking a 19.9% stake in SAS as part of a $1.2 billion financing package agreed to exit US Chapter 11 bankruptcy from a consortium also including Castlelake, Lind Invest, as well as the Danish government.
“There are two important steps that we still have to go through,” explained van der Werff during a press briefing at the IATA AGM in Dubai to mark the carrier’s planned move to SkyTeam – of which Air France-KLM is a founding member – this September.
SAS in March secured conditional US court approval for its planned reorganisation plan. One of the conditions is to finalise local implementation of the agreement. “We are going through that at the moment, so in plain language to make Chapter 11 stick in Scandinavia from a legal perspective,” says van der Werff. He says this could be completed in a month, but more likely will slip into July or August.
The second condition is the regulatory approval process. ”We expect to have no issues with that because this is a very different case from other cases that we have seen,” he says. Recent consolidation moves from Lufthansa and IAG for ITA Airways and Air Europe respectively have both stumbled amid Commission investigations.
”There is a reason why this deal is set up the way it is, because SAS and Air France-KLM will still be competitors,” says van der Werff. ”We are talking SkyTeam, we are talking investment by a consortium, but Air France-KLM is buying 19.9% and that still makes us and keeps us as competitors.
“All cases are different. But we believe we have a strong case because it is market tested – there is private equity involved, which by definition means this case is completely market tested,” he says. “So on that basis we do believe that we ran a very competitive process and we believe therefore that will factor into the Commission’s decision.”
