Commentary: Walking away from Air India could cost SIA more

Singapore Airlines (SIA) invested in Air India in 2024, despite the airline's mounting losses, which reached $2.33 billion in the fiscal year ending March 2025. The partnership with the Indian national carrier, now merged with SIA-owned Vistara, is causing SIA to face tough decisions. Air India requires SIA's assistance in the form of US$1.5 billion in fresh equity.

This investment could amount to nearly US$380 million based on SIA's 25.1 per cent stake in the merged entity. SIA's CEO, Goh Choon Phong, acknowledged the challenges faced by Air India as it navigates Pakistan airspace closures, a depreciating Indian rupee, loss of key markets due to geopolitical conflicts, high fuel prices, and a corporate culture resistant to change.

The tragic AI171 crash in June 2025 further adds to the company's woes. Despite these issues, SIA believes the strategic opportunity to enter India's aviation market outweighs the short-term costs. India is the world's third-largest aviation market, projected to triple by 2044, making air travel a national priority. Air India's international traffic rights, airport slots, and strong domestic network are valuable assets for SIA.

Furthermore, SIA brings operational expertise, discipline, and customer service to the partnership. While the journey ahead will be challenging, SIA must prove to its shareholders and the public that their long-term investment in Air India will yield sustainable returns and help establish twin hubs in two major aviation markets.