Air India investment does not impede SIA’s operational capabilities: Jeffrey Siow

SINGAPORE – Singapore Airlines’ (SIA) investment in Air India has no adverse impact on its ability to operate and serve Singaporeans, and it must continue to stay the course in challenging markets to remain competitive globally, Transport Minister Jeffrey Siow said on Sept 8.

While SIA has a 25.1 per cent stake in Air India, the latter’s finances are not SIA’s, and thus its losses do not automatically become the Singapore carrier’s liabilities. SIA is also not obliged to accede to the Indian airline’s request for capital injection, Siow added.

Air India, the second-largest airline in India, was reportedly seeking about US$1.5 billion (S$1.9 billion) in fresh equity from its owners, Tata Sons and SIA, in August, months after it posted a record annual loss.

The carrier and its budget unit Air India Express posted combined losses of US$2.33 billion in the fiscal year ended March, more than double the previous year’s losses.

Siow said the onus is on SIA’s board and management to decide whether an investment would make commercial sense for the company and its shareholders, “because it is their duty and responsibility to do so”.

He was replying to a parliamentary question submitted by Workers’ Party MP Kenneth Tiong (Aljunied GRC) about whether SIA’s losses from its foreign investments have been assessed against its capacity to provide essential transport services.

Tiong also asked whether such continuing losses would invoke Section 67B of the Civil Aviation Authority of Singapore Act, which would require SIA to notify the authorities of any event or problem that seriously disrupts its ability to provide an essential transport service.

Siow noted that Section 67B is not a financial reporting rule, and losses in a foreign associate do not necessarily meet that test on their own.

“The relevant question is whether such losses, or anything else, reach the point of materially constraining the resources available for SIA’s fleet, maintenance or network operations here. That is a judgment based on facts, and we are nowhere close to this scenario.”

SIA acquired its stake in Air India after Vistara, its full-service airline joint venture with Tata Sons, merged with the Indian carrier in November 2024. Tata Group owns a majority stake.

Since then, SIA’s 25.1 per cent stake has been the single largest drag on its earnings. For the 2026 financial year (FY) ended March 31, it booked a $945.2 million loss for its share in the joint venture.

Siow pointed to SIA’s strong financial results as a reason for continued confidence in the carrier’s ability to deliver air services in Singapore. SIA posted record revenues of $20.5 billion and a 39 per cent jump in operating profit for FY2026.

But the carrier posted a net loss of $76 million for the first quarter of FY2027, a point that Tiong noted in his reply to Siow.

The WP MP said other national carriers had been able to turn around their losses in a short number of years, while SIA continued to post losses from its Air India investment.

He added that there could be further challenging conditions in the Indian market. The Indian government is mulling over a policy change that would allow the operators of the New Delhi and Mumbai airports – two of Air India’s largest hubs – to operate their own airlines, which could put a larger dent in the carrier’s business.

He questioned whether the Government has put a limit on SIA’s further investments in Air India.

He also asked whether it would intervene and approve the drawing of reserves should SIA request it to support the Indian carrier, as it had previously done to support SIA’s $8.8 billion recapitalisation package during the Covid-19 pandemic through Temasek, SIA’s largest shareholder.

The risks are very high, given SIA’s smaller non-controlling stake in Air India, Tiong highlighted. Drawing comparisons to a private investment fund, he said Parliament serves the role of a “risk team” to SIA’s board in making its investment decisions.

“I support SIA’s ability to make its own decisions, but I do not support further cash infusions from Temasek to stand behind a decision that, on these facts, reasonable members of the public are questioning,” he said.

“This cannot be a blank cheque, least of all on a minority stake. We ask because through the reserves, Singaporeans are SIA’s stakeholders of last resort, and the stakeholder of last resort needs to know where the line is.”

In response, Siow asked if Tiong’s position was that SIA should not participate in India, one of the fastest aviation markets in the world. It would also be difficult to identify a buyer or the appropriate price should SIA sell its stake, he said.

“It’s easy to criticise, but I suspect it is much harder for the Member to tell us what SIA should do.”

Siow cited the WP’s motion tabled by Tiong and Jamus Lim (Sengkang GRC) on Aug 5 calling for more focus on the growth of small and medium-sized enterprises rather than multinational companies to drive Singapore’s economy, saying that it is equally important to ensure Temasek portfolio companies like SIA remain globally competitive as well.

This entails entering potentially difficult markets against incumbents, “and staying the course when there is turbulence”, he said.

“We cannot have it both ways. We cannot tell our companies to go out and compete, and then treat every tough year abroad as proof that they should stay home.”

He added that Temasek’s financial support of SIA during the pandemic, which included $15 billion in equity and bonds that the investment company underwrote, was also meant to bolster the entire aviation sector, with the view that air travel would make its recovery. Ultimately, Temasek had made good returns on this investment, he noted.

“The Government does not judge Temasek on any single holding,” he said, adding that the company’s $500 billion portfolio will always contain investments with different risks and time horizons. “Some will look worse than others on any given day, and that’s what investing is.”

Siow also said Tiong was insinuating that SIA was not making its investment decisions on a commercial basis but for other reasons, and that Singaporeans “somehow owe Air India a living” through the carrier’s investments. Both of these claims had no merit, the minister said.

He also reiterated the Government’s position that discussions on SIA’s investment in Air India should not seek to exploit racial divisions for political purposes, a point that Tiong emphasised was never his intention.