Temasek Backs Singapore Airlines’ Air India Investment Amid $1.5 Billion Funding Request
· Free Press Journal
Singapore state investor Temasek, the majority shareholder of Singapore Airlines, has expressed support for the airline’s investment in Air India amid increasing scrutiny over the Indian carrier’s financial performance and fresh funding requirements, Reuters reported.
Air India has sought approximately $1.5 billion in additional equity from its owners, Tata Sons and Singapore Airlines, according to a Reuters report. Singapore Airlines holds a 25.1% stake in Air India, while the remaining shareholding is with Tata.
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Temasek Supports Long-Term Air India Strategy
Temasek’s backing comes as questions emerge in Singapore over whether Singapore Airlines should continue committing capital to Air India. Kenneth Tiong, a lawmaker from Singapore’s opposition Workers’ Party, had urged that Temasek’s funds not be used to support the Indian airline.
Singapore Lawmaker Questions SIA's Investment In Air India As Airline Seeks $1.5 Billion BailoutA commentary in Singapore’s Business Times also questioned the strategic value of Singapore Airlines’ 25.1% holding, arguing that an exit could be difficult because Tata is the most likely buyer.
Responding to the commentary, Juliet Teo, joint head of portfolio development at Temasek Singapore, said the investor viewed Singapore Airlines’ Air India investment with a long-term perspective and supported the decision.
Teo noted that transforming Air India involves complex operational and integration challenges that will take several years. She added that the outcome could also be affected by external developments, including geopolitical tensions, airspace disruptions and fuel price fluctuations.
Air India Faces Challenges
Tata took control of the former state-owned airline in 2022 and has since undertaken a major restructuring and modernisation programme. However, Air India has faced several setbacks, including Pakistan’s airspace restrictions on Indian airlines, disruptions linked to the US-Israel conflict with Iran and the aftermath of a crash last year that killed 260 people.
For the year ended March, Air India and Air India Express reported combined losses of $2.33 billion, affecting Singapore Airlines’ profitability.
Singapore Airlines said its board would carefully assess any request for additional funding from Air India, while considering its own capital requirements and the Indian airline’s business strategy. Temasek, meanwhile, has not confirmed whether it would support a potential capital contribution.