Singapore Airlines owner Temasek backs Air India investment amid concerns in city-state

Temasek, Singapore's government-owned investment firm that holds a majority stake in Singapore Airlines (SIA), has expressed support for SIA's decision to invest in Air India. This comes as concerns grow in Singapore over the struggling airline's need for fresh capital from its shareholders, Tata Sons and SIA itself, which holds a 25.1% stake in Air India.

Temasek's statement, issued amid these concerns, indicates that they are taking a long-term view of SIA's business decisions. They acknowledge the complex, multi-year challenges involved in transforming Air India and recognize that aviation outcomes are influenced by various factors, including aircraft innovation, fleet renewal cycles, and external factors like fuel price volatility.

Air India, which was taken over by the Tata group from the government in January 2022, is facing significant headwinds, including a closure of the Pakistani airspace, disruptions related to the West Asia conflict, and high fuel prices. The airline recently sought around $1.5 billion from its shareholders.

Opposition parliament member Kenneth Tiong has raised concerns over SIA's potential investment in Air India, questioning the impact on Temasek. He believes SIA faces "bleak choices" as it grapples with Air India's financial struggles. A recent Business Times article echoed these concerns, suggesting SIA is "trapped in Air India's money pit".

In response to these criticisms, Temasek released a statement that SIA's investment in Air India is part of a strategic move to secure long-term growth beyond Singapore. SIA has a long history in the India market, including through its subsidiary Vistara since 2013. Temasek supports SIA's participation in India's aviation growth.

However, SIA has stated that it will carefully consider any additional capital requests from Air India, taking into account the group's other capital requirements and Air India's business strategy. The company also noted that capital allocation decisions are made through a disciplined process considering various factors.

Opposition MP Tiong has further questioned the sustainability of SIA's losses, pointing to the fact that SIA's profit for the 2025-26 year fell 57% year-on-year, partly due to Air India's heavy losses. He also highlighted that Air India's turnaround is expected to take up to a decade, and its chairman, N Chandrasekaran, is set to step down in February 2027.