Air France-KLM has begun a process to take a controlling stake in fellow SkyTeam Alliance member Scandinavian Airlines (SAS).
If the arrangement receives regulatory approval, Air France-KLM hopes to close the transaction in the second half of 2026.
Air France-KLM took a 19.9% stake in SAS as part of the financial restructuring package that ushered the Sweden-headquartered airline out of Chapter 11 bankruptcy last summer.
Under the new takeover agreement, Air France-KLM would acquire the SAS stakes currently held by global investment firm Castlelake and Danish company Lind Invest, leaving it with 60.2% of the Scandinavian carrier. The Danish state would retain 26.4% ownership of SAS and a seat on the board.
The purchase price would be determined at closing, based on SAS's valuation.
SAS currently codeshares and interlines with Air France-KLM. SAS joined SkyTeam last September, jumping over from the Star Alliance as Air France-KLM became a large shareholder.
"This new step would allow Air France-KLM and SAS to fully unlock their synergy potential via a comprehensive integration in all areas of business, including loyalty, and would extend beyond commercial activities," Air France-KLM said in a statement.
SAS said the move reflects a broader trend toward airline consolidation.
SAS called joining Air France-KLM, "a step that is essential to ensuring long-term competitiveness for European carriers in an increasingly globalized market."