Singapore Airlines to seek tougher terms for any fresh Air India funding, sources say

Singapore Airlines, majority-owned by Temasek, plans to negotiate tougher terms for any new funding it provides to Air India, according to sources. These conditions may include increased board voting power and requirements for the Indian airline to reduce its losses. Temasek, the majority shareholder, would not directly fund Air India or interfere in its management decisions.

The proposal comes after Air India sought approximately US$1.5 billion in fresh equity from its owners. Although Tata Sons, Air India's majority owner, has approved a US$1.1 billion infusion, Singapore Airlines will evaluate the request based on Air India's strategy, cash flow, and other capital needs. The push for stricter terms stems from Singapore Airlines' desire to justify its investment in Air India, which incurred a US$2.33 billion loss in the fiscal year ending March.

This pressure is exacerbated by Singapore Airlines' history of financial losses in overseas ventures. Air India's new CEO, Tewolde Gebremariam, took over from Campbell Wilson in July. Singapore Airlines holds a 25.1% stake in Air India, giving it limited influence, but enough power to block certain major decisions.