Temasek backs Singapore Airlines’ Air India investment, cites long-term growth potential
Singapore sovereign wealth fund Temasek on Saturday backed Singapore Airlines’ investment in Air India, saying the Indian carrier’s transformation is a complex, multi-year process involving significant operational and integration challenges.
Temasek, a major shareholder in Singapore Airlines (SIA), issued the statement amid concerns in some quarters over SIA’s investment in the loss-making Indian airline.
Singapore Airlines holds a 25.1 per cent stake in Air India, while the remaining ownership lies with Tata Sons, which acquired the airline from the Indian government in January 2022.
Temasek said SIA has identified the development of a second hub outside Singapore as an important part of its long-term growth strategy. India, the world’s third-largest air transport market after the US and China, is well placed to serve that purpose, it said.
SIA has had a presence in the Indian market for years, including through Vistara, and its investment in Air India provides an opportunity to expand its participation in the country’s growing aviation sector.
“As a shareholder of SIA, we view their business decision from a long-term perspective and are supportive of it,” Temasek said.
The statement followed concerns raised earlier this week by Singapore MP Kenneth Tiong Boon Kiat over reports that Air India was seeking an additional $1.5 billion in funding. He argued that any further investment could have a significant impact on Temasek because of its substantial ownership of Singapore Airlines.
Singapore Airlines Group reported a 57 per cent decline in net profit to SGD 1.184 billion for the financial year ended March 2026. The decline was partly attributed to the absence of a one-time accounting gain linked to the Vistara merger and losses associated with Air India.
Air India recorded a loss of more than SGD 3.56 billion in the same financial year, as the airline faced the impact of airspace restrictions and other operational challenges. The figures were reported in SIA Group’s annual financial report released in May.
Reports earlier this week said Air India was looking to raise an additional $1.5 billion, equivalent to more than Rs 14,000 crore at current exchange rates.
Temasek acknowledged that Air India’s transformation would take time, saying projects of this scale rarely progress in a linear manner. It cited factors including aircraft and fleet-renewal cycles, airspace disruptions, geopolitical developments and fuel-price volatility.
Singapore Airlines said on August 27 that its board would carefully assess any request for additional capital from Air India, taking into account SIA Group’s own capital requirements and Air India’s business strategy.
Tata Sons and Air India Chairman N Chandrasekaran said in July that the airline’s transformation should be viewed as a five-to-10-year process, given supply-chain disruptions, legacy systems, fleet requirements, cultural changes and the need to develop a larger pool of aviation professionals.
Meanwhile, Tiong has said he would not support future use of Temasek funds to support Air India through Singapore Airlines. He has also submitted a question to Singapore’s Transport Minister concerning the impact of Air India-related losses on SIA and its obligations as a designated carrier.
The issue is scheduled to be taken up in Singapore Parliament on September 8.
with inputs from PTI
