Singapore Airlines must grow overseas, says transport minister

Singapore's transport minister defended Singapore Airlines' investment in Air India, stating that the city-state's flag carrier must expand overseas due to a limit on the number of people flying to or from Singapore. Minister Jeffrey Siow explained that the flag carrier is a listed company that finances investments through its own balance sheet and has not sought additional capital from shareholders.

The airline, which is majority-owned by Singapore state investor Temasek, holds a 25.1% stake in Air India. This investment has affected Singapore Airlines' earnings and drawn political scrutiny as Air India's losses have increased during a multi-billion dollar turnaround expected to take up to a decade. Siow noted that the value of the investment in Air India is for Singapore Airlines and its shareholders to determine, and that the current assessment is that the airline's ability to serve Singaporeans is not negatively impacted.

He reiterated that Singapore Airlines has not sought further capital from shareholders and that any such decision would be a commercial matter between the company and its shareholders. Singapore Airlines confirmed that investments in India, including the stake in Air India, are funded through the flag carrier's internal resources with board approval and a disciplined capital allocation framework.

The transformation of Air India is a complex, multi-year process not expected to be linear, with the airline's investment in the Indian carrier being a long-term strategic commitment aligned with its multi-hub strategy. The funding request for Air India prompted an opposition lawmaker to urge that Temasek's funds not be used to support the Indian carrier.

Senior Minister K Shanmugam emphasized that as a shareholder of Singapore Airlines, Temasek expects the company to make responsible investment decisions, and that these decisions are up to the company to make. Shanmugam also requested the police to investigate racist comments made about the Air India investment debate on social media.