Industry Odisha Bureau, Sep 08: Singapore’s government has defended Singapore Airlines’ investment in Air India. The carrier holds a 25.1% stake in the Indian airline. That stake has weighed on Singapore Airlines’ earnings.
Air India’s losses have widened during a costly turnaround. Reuters reported the carrier is seeking fresh equity. The reported request totals about $1.5 billion.
That funding request goes to Air India’s owners. Those owners are Tata Sons and Singapore Airlines. Neither has confirmed a specific contribution yet. Transport Minister Jeffrey Siow addressed the matter in parliament. He said Singapore Airlines funds investments from its own balance sheet. The airline had not sought further shareholder capital, he said.
Siow argued overseas growth remains essential for Singapore Airlines. Singapore’s domestic market limits how many passengers can fly locally. International expansion, he said, follows naturally from that constraint. “Whether its specific investment in Air India proves valuable is for (Singapore Airlines) and its shareholders to answer,” Siow said. He added Singaporeans’ service levels remained unaffected currently.
Singapore Airlines is majority-owned by state investor Temasek which is itself not Air India’s direct shareholder. Senior Minister K Shanmugam said investment decisions rest with the company. Singapore Airlines issued its own statement on Tuesday. It said India investments have used internal resources so far. That approach will continue, subject to board approval.
Capital allocation remains disciplined, the airline said. Any further funding would follow the same framework. No commitment beyond that has been made public. The airline described Air India’s transformation as complex and lengthy. It called the programme multi-year and unlikely to progress smoothly. Singapore Airlines still frames its stake as a long-term commitment.
That commitment aligns with a broader multi-hub strategy. India represents one node within that wider international approach. The airline has not abandoned that positioning despite current pressure. Political scrutiny followed news of the funding request last month. Workers’ Party lawmaker Kenneth Tiong raised concerns in parliament. He argued Temasek funds should not support Air India directly.
That question received its parliamentary answer on Tuesday. Shanmugam separately addressed online reaction to the debate. He described some comments as anti-Indian and racist. Shanmugam said Temasek’s leadership had faced ethnicity-based attacks online. He asked police to examine those comments. The core dispute, though, remains a financial one.
Singapore Airlines faces a near-term earnings drag from Air India. Its longer-term strategic rationale remains officially unchanged. Whether that rationale pays off depends on a turnaround still years from resolution.
