Transport Minister Jeffrey Siow says international investments are essential for Singapore Airlines to expand beyond its limited domestic market, amid scrutiny over Air India’s financial losses.
Singapore: Singapore’s government has defended Singapore Airlines’ (SIA) investment in Air India, stating that overseas expansion is necessary for the carrier to sustain its long-term growth. Transport Minister Jeffrey Siow said the airline must look beyond Singapore’s relatively small domestic market to access new passenger bases and growth opportunities.
Addressing Parliament on September 8, Siow said SIA, a publicly listed company, finances its investments through its own balance sheet and has not sought additional capital from shareholders to support its overseas ventures.
The defence comes amid growing scrutiny of SIA’s 25.1% stake in Air India, whose losses have widened during an extensive turnaround programme. The Indian carrier has reportedly sought around US$1.5 billion in fresh equity funding from its owners, Tata Sons and Singapore Airlines, to support its transformation.
Siow said returns from overseas investments may take time to materialise, adding that the commercial value of the Air India investment would ultimately be assessed by SIA and its shareholders. He also maintained that the investment had not adversely affected the airline’s ability to provide essential air services in Singapore.
SIA reiterates commitment to funding investments internally
Singapore Airlines said its investments in India have been, and will continue to be, financed through internal resources, subject to board approval and a disciplined capital allocation framework.
The carrier described its investment in Air India as a long-term strategic commitment aligned with its multi-hub strategy. The approach enables SIA to gain a stronger presence in major international aviation markets while complementing its existing hub in Singapore.
SIA acquired its 25.1% stake in Air India following the November 2024 merger of Air India and Vistara. The investment provides the Singapore-based airline with direct exposure to India’s large and expanding aviation market, as well as opportunities to strengthen international connectivity.
However, the investment has attracted political attention in Singapore following reports of Air India’s additional funding requirements. Workers’ Party lawmaker Kenneth Tiong had raised concerns about whether continued losses at overseas associates could affect SIA’s ability to fulfil its essential transport obligations.
Singapore Senior Minister K. Shanmugam said Temasek, SIA’s majority shareholder, expects responsible investment decisions, while emphasising that the airline’s management and board are responsible for determining the commercial viability of individual investments.
Air India’s turnaround remains a long-term undertaking
Air India’s transformation involves a broad overhaul of its operations, fleet, systems and network following its return to the Tata Group. The programme is expected to span several years, with progress and financial returns unlikely to emerge uniformly.
For SIA, the investment forms part of a wider strategy to expand its international reach beyond Singapore’s geographic and market limitations. Access to India’s domestic passenger base and international traffic flows could strengthen connectivity between India, Southeast Asia, Europe and other global markets.
Siow reiterated that the government’s assessment found no current adverse impact on SIA’s ability to serve Singaporeans. He added that the ultimate success of the investment would depend on its commercial performance and the judgement of the airline and its shareholders.
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