✈️ Breakups are SASsy

Hello there,

The Departure Times has just landed with this week’s piece. Right on time.

I received quite a few positive feedback on the first edition from last week. I appreciate those a lot. I’m also super excited to bring more from The Departure Times every week.

So now, brew a cup of coffee, sit back, and enjoy this piece.

This week, you can read about:
🛫 The SASexit from Star Alliance and its move to SkyTeam
🌍 MakeMyTrip’s global expansion
🤝🏻 IAG’s Air Europa takeover may be in jeopardy

It’s only a 7-min read.

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THIS WEEK’S TOP STORY
The SASexit: The Scandinavian airline leaves Star Alliance on August 31 and joins SkyTeam the day after

When it was announced last October that Air France-KLM would take a 19.9% stake in SAS, it was already obvious that the Scandinavian airline would eventually switch airline alliances - even if they are one of the founding members of Star Alliance.

Yesterday, they finally announced the timeline for SASexit.* The airline will leave Star Alliance on August 31 and join SkyTeam on September 1.

The main question is, of course: what impact will this alliance switch have?

But before discussing that, we need to overview the essential “why” question:

Why does Air France-KLM’s involvement & the move to SkyTeam make sense?

💰 The long tale of SAS’ financial issues

The airline has been struggling financially for over 15 years. The pandemic escalated their troubles, alongside the rising fuel prices and pilot strikes. This eventually led to filing for Chapter 11 bankruptcy in July 2022.

Since then, a restructuring program has been in place that also includes a shareholder shake-up. It’s a complex process but once it’s finalized, Air France-KLM, the Danish government, and some other investment funds will own the Scandinavian carrier.

Air France-KLM will take a 19.9% stake with the option to take controlling interest after two years. Denmark will have 25.8% ownership.

This also means that the de facto Scandinavian flag carrier will only have one governmental ownership, as Sweden’s stakes are being wiped out - while Norway already left SAS in 2018.

 📛 SAS wasn’t a “star” in Star Alliance with being left out of the transatlantic joint venture

While being in an airline alliance certainly has many benefits, the honeypot is the transatlantic joint venture.

But within Star Alliance, SAS has no access to that honeypot owned by Air Canada, Lufthansa Group, and United.

For years, there were rumors of SAS being invited but that did not happen.

With Air France-KLM’s appearance, this will change. Ben Smith, the airline group’s CEO confirmed that the Scandinavian carrier will join the transatlantic JV with Air France-KLM, Delta, and Virgin Atlantic.

This isn’t just a nice gesture but a huge benefit for both the airline group and SAS. The latter will finally be able to greatly leverage its position in the Nordics in a prosperous business between the two continents.

🌟 Air France-KLM will expand and strengthen its position in Scandinavia

The airline group already has some strong connections to the Nordic countries thanks to KLM’s network from Amsterdam. But with this investment, they will expand their influence in the Northern European region even more.

And, of course, the gain of Air France-KLM is the loss of Lufthansa Group and Star Alliance, in general.

Air France-KLM alone couldn’t beat LH Group in the region but with SAS, they might be able to do so.

So what impact does the move to SkyTeam have?

Until August 31, nothing changes. Members of SAS’ EuroBonus program can still use the SkyTeam benefits - including earning & redeeming points with other Star Alliance airlines.

From September 1, these will change:

• EuroBonus members can earn & redeem points with all SkyTeam alliance airlines,

• Claiming missing points for Star Alliance flights completed before August 31 will only be available until September 8,

• EuroBonus Silver, Gold, and Diamond members will enjoy similar benefits when flying on most SkyTeam airlines as they do now with Star Alliance carriers.

For now, EuroBonus will remain as SAS’ frequent flyer program but it may change in the future.

According to previous reports, if Air France-KLM secures majority ownership in SAS, they will merge their two programs - Flying Blue and EuroBonus.

Is this a pure win or loss for the passengers? There is no clear answer.

There are almost as many pros as cons for this alliance switch, from a passenger perspective. I won’t name those here, but if you want, you can read some in this piece.

*Yeah, this “exit” thing is quite overused but I just had to hop on that cliché-train.

NEWS BRIEFS
MakeMyTrip Goes Global, Targets Mainly Indian Diaspora

MakeMyTrip, India’s largest online travel agency, has just made a huge expansion this week. Going from 3 available markets (India, UAE & US) to 150 countries means they truly became a global player.

According to Skift’s report, this expansion was made possible as they reached compliance with certain regulations like the EU-wide General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Rajesh Magow, MakeMytrip’s co-founder & CEO said that this global expansion will help them to reach “the vast Indian diaspora” as well as a broader audience to increase Indian inbound travel.

Are they gonna be more attractive for international travelers interested in Indian inbound travel? Time will tell.

In terms of certain Indian destinations, accommodation content, and some niche interests (spiritual and wellness travel), they may have a strong added value.

Source: Skift

IAG’s Air Europa Takeover May Be At Risk as EU Objection Is Coming

The International Airlines Group (IAG), which also owns British Airways, Aer Lingus, and Iberia, is facing objections from the European Commission on its planned takeover of Air Europa.

The EU’s antitrust enforcer will voice its concerns about the potential of harmed competition in the Spanish market, regarding domestic, short-haul, and long-haul flights as well.

This objection comes despite IAG’s indicated efforts to give up airport slots and routes and also potentially provide competing airlines with aircraft.

But it seems, the Commission is not convinced by those efforts.

In January, preliminary concerns were already shared that mainly regarded routes without high-speed train alternatives and routes between the mainland and Spanish islands - among some other non-EU short-haul routes.

Since IAG already owns 20% of Air Europa’s stakes, the EU’s decision now impacts the potential full takeover of the Spanish carrier.

Source: Reuters

More Troubles For Boeing As Whistleblower Claims Structural Flaws on 777 and 787

If the already existing troubles wouldn’t be enough for Boeing, they may face new ones.

A Boeing quality engineer, Sam Salehpour, went public on Tuesday, claiming that almost 1,000 Boeing 787s and 400 777s are at risk of premature fatigue damage and structural failure - thanks to manufacturing shortcuts aimed at increasing production rates.

Salehpour’s lawyers forwarded his allegations to the Federal Aviation Administration (FAA). The agency is investigating the claims.

Boeing already rejected these allegations, saying that “these claims are inaccurate”.

Sam Salehpour, the whistleblower quality engineer will speak at the U.S. Senate next week to “examine Boeing’s broken safety culture”.

Source: Seattle Times

FAVORITE READS
My weekly “Inflight Food for Thought”

📱 United is being praised on LinkedIn for its great UX solutions - from bag tracking, through iPhone Dynamic Island fight updates integration to airplane info cards. Not surprised they won an award at the 2023 World Aviation Festival for their mobile app.

☀️ Monday was all about the solar eclipse. Some passengers were lucky enough to experience this natural beauty at cruising altitude. Delta had extensive coverage of their two flights that crossed the solar eclipse’s path. You can also see some more footage here from an Austin-Detroit flight.

🧳 Deloitte published its 20-page “Facing Travel’s Future” report. While the whole report is worth a read, the three main focus areas are not surprising: 1) young travelers, 2) sustainability, and 3) using AI to enhance travel experiences.

SOCIAL MEDIA CONTENT OF THE WEEK
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