SAS's New Embraer Jets and Air France-KLM Stake Highlight Recovery

In early July 2025, Scandinavian Airlines (SAS) announced two significant strategic advancements, reflecting its recovery trajectory following a major restructuring initiated during the COVID-19 pandemic. First, SAS placed an order for 45 new-generation Embraer E195-E2 jets, which marks its largest acquisition from an Original Equipment Manufacturer (OEM) since 1996. Additionally, Air France-KLM revealed plans to increase its stake in SAS from 19.9% to 60.5%, pending regulatory approval. These developments indicate renewed confidence in SAS's future, both from the airline itself and its primary partner.

The order for the Embraer E195-E2 jets, scheduled for delivery from 2027 to 2033, allows SAS to modernize its regional fleet, which comprises 117 aircraft, including 13 Embraer jets, two Boeing 737s, and 90 Airbus A320 family aircraft. According to Anko van der Werff, President and CEO of SAS, this order is a "major investment" that underscores the airline's commitment to future growth. The E195-E2, powered by Pratt & Whitney PW1900G engines, promises a 29% improvement in fuel efficiency and a 62% reduction in noise compared to its predecessor, as noted by Embraer’s corporate communications team.

The planned acquisition of a controlling stake by Air France-KLM further illustrates SAS’s strategic repositioning within the competitive airline landscape. Benjamin Smith, CEO of Air France-KLM, praised SAS for its "impressive performance" and expressed confidence in the airline's potential for growth through deeper integration within the Air France-KLM Group. This acquisition, which involves buying out CastleLake and Lind Invest’s shares, will solidify SAS's role as a subsidiary of a leading European airline conglomerate, enhancing synergies in procurement, IT, and administrative functions.

Historically, SAS has navigated significant challenges since 2020, including bankruptcy protection and substantial restructuring efforts. The airline returned to profitability in FY2024, a testament to its effective recovery strategies. The upcoming integration with Air France-KLM is regarded as a pivotal step towards greater consolidation in the European airline market, which remains fragmented compared to North America. The potential synergy from SAS’s integration could elevate Air France-KLM’s seat capacity, allowing it to compete more effectively with rivals like Lufthansa Group and International Airlines Group (IAG).

As the European airline industry continues to evolve, SAS's advancements in fleet modernization and strategic partnerships could redefine its market standing. The implications of these developments extend beyond SAS, potentially reshaping competitive dynamics within Europe’s aviation sector. As the industry looks ahead, analysts will closely monitor how the merger and fleet enhancements impact operational efficiencies and market share.