Scandinavian Airlines System, colloquially known as SAS, just dropped a bombshell announcement, leaving airline loyalists and enthusiasts dumbfounded.

The airline announced its sudden departure from the Star Alliance amid a major shift in its organizational structure. Here's what the move entails and why it's such a big deal.

A Founding Member

When the Star Alliance was founded in 1997, SAS played a key role in the Alliance's establishment. Together with United, Lufthansa, Air Canada, and Thai Airways, the carriers have continuously contributed to Star Alliance's growth - now making it the largest airline alliance in the world.

SAS' membership in Star Alliance gave it particularly close partnership ties with United Airlines. As such, most of SAS' destinations in the U.S. are major United hubs. These include Newark (EWR), Washington Dulles (IAD), Chicago O'Hare (ORD), and San Francisco (SFO).

The Star Alliance membership allowed SAS flights to be sold by its partner airlines. For instance, if you wanted to book a flight from Chicago to Stockholm, you could book it through United's website. The flight would appear as "Operated by SAS" on the site, as SAS is the only airline operating the route.

Now that SAS has announced its imminent departure from Star Alliance, the ability to book its flights through its Star Alliance partners will no longer be possible.

This news is also unprecedented, as it seems counterintuitive for a group's founding member to close up shop and leave. However, moving to SkyTeam could be better as it could save SAS from bankruptcy.

SkyTeam Shift

SAS's next chapter sees it shifting to another major airline alliance: SkyTeam. This move comes after the Air France-KLM Group won a bid to provide exit financing for SAS. The move will also help the carrier emerge from Chapter 11 bankruptcy protection.

If this deal is approved, Air France-KLM Group will command a 19.99% stake in SAS. The full implementation of this stake will go into effect in the second quarter of 2024. As for the SkyTeam changeover, SAS still needs to provide a set timeline for this.

With such a significant stake in SAS, Air France-KLM Group will be able to grow its reach in Scandinavia and the Nordic region overall. This decision will enhance connectivity for Scandinavian and European travelers in general. Though that seems possible, it's unknown if shifting to SkyTeam means SAS will launch new services to mainly SkyTeam hubs.

If this happens, we could see an instance where SAS ditches Newark completely and moves its entire New York operation to JFK, a major Delta hub. This scenario is only an example; however, this scenario maintains a sense of unlikeliness, given that the airport is slot-restricted.

Similarly, SAS could start flights to other Delta hubs, such as Atlanta (ATL) or Minneapolis (MSP). Again, such moves cannot be expected anytime soon until the full changeover happens.

Conclusion

Scandinavian Airlines announcing its shift to the SkyTeam Alliance is major news for the worldwide aviation community. While Star Alliance carriers like United will continue serving SAS hubs like Oslo (OSL) and Stockholm (ARN), the special partnership these carriers once had will be missing.

It will be interesting to see what Air France-KLM Group will make of this imminent stake in SAS, primarily how it will use this stake to expand its reach in Scandinavia and how SAS will use its new spot in SkyTeam to grow its global reach.