CNA Explains: Beyond the Air India stake, how have SIA's other investments fared?
One analyst says Singapore Airlines' track record of investments in other airlines has been "pretty underwhelming".
Singapore Airlines (SIA) has made several investments in other airlines, with mixed results. Its ownership of Air India has been particularly scrutinized after the Indian carrier requested additional funding due to a record loss. SIA owns a 25.1% stake in Air India, which has been funded through internal resources. The airline's investment track record has been described as "underwhelming" by one analyst, with the Air India investment being the latest in a series of unsuccessful investments.
SIA's stake in Virgin Atlantic, acquired in 1999, was sold off in 2012, while its 25% stake in Air New Zealand was diluted after the New Zealand government intervened to rescue the airline. SIA sold its 6.3% stake in Air New Zealand for US$336 million in 2004. A subsidiary, Tiger Airways, set up an Australian arm that incurred losses until it was bought out by Virgin Australia in 2014.
Virgin Australia also acquired SIA's stake in Virgin Australia in 2012 and 2013, with the investment being written off after the company entered voluntary administration.
SIA's Scoot, a budget carrier, formed a joint venture with Nok Airlines in 2014 but liquidated it in 2020, resulting in a significant charge due to the impairment of leased planes. Despite these setbacks, SIA maintains that its investments are assessed on their merits, considering factors such as strategic fit, long-term value, and alignment with the group's strategy and capital requirements.
However, analysts note that SIA often takes minority stakes without full control, making it difficult to address issues within the invested airlines.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
