Temasek backs SIA's Air India bet

News of the funding request prompted Kenneth Tiong, a lawmaker from Singapore's opposition Workers' Party, to urge that Temasek's funds not to be used to shore up the Indian carrier. Singapore's Business Times also ran a commentary arguing that Singapore Airlines could not realistically exit its Air India stake, with Tata the only plausible buyer.

It questioned what its 25.1% holding offered beyond a board seat and a share of the losses, while saying the strategic logic of the investment still held.

In a letter to the newspaper responding to that commentary, Juliet Teo, joint head of portfolio development at Temasek Singapore, said Temasek viewed Singapore Airlines' decision to invest in Air India from a long-term perspective and was supportive of it.

The letter said the transformation of Air India involved complex, multi-year operational and integration challenges, with outcomes shaped by industry developments and external factors such as airspace disruptions, geopolitical developments and fuel price volatility. "Efforts of this scale take time and are not expected to be linear," it said.

Temasek did not address whether it would support any capital contribution by Singapore Airlines to Air India. Air India's multibillion-dollar revamp has been under way since Tata took control of the former state-owned carrier in 2022.

Air India has been hit by Pakistan's airspace ban on Indian carriers, disruptions from the US-Israeli war with Iran, and the fallout from a crash last year that killed 260 people. In the year to March, the airline and its budget unit Air India Express posted combined losses of $2.33 billion, weighing on Singapore Airlines' profits.

Singapore Airlines said on Thursday its board would carefully consider any requests for additional capital from Air India, taking into consideration the group's other capital requirements and Air India's business strategy.

Singapore MP opposes Temasek funding for Air IndiaA Singapore opposition lawmaker has urged that state investor Temasek's money not be used to shore up Air India, after Reuters reported the Indian carrier had asked owners Tata Sons and Singapore Airlines, of which Temasek is the majority owner, for about $1.5 billion.

Kenneth Tiong, a member of parliament for the opposition Workers' Party, said in a social media post on Wednesday that because Singapore Airlines owns about 25% of Air India and Temasek in turn owns most of the Singapore carrier, the request was "not only a question for private shareholders.

""I will not support, nor expect, any future use of Temasek's funds to prop up Air India via Singapore Airlines. If Singapore Airlines wants to continue its bet on Air India, it should do so on its own two feet, and not on Temasek's," he said.

"Whichever of the two writes the cheque, it will have a significant impact on Temasek," he added, without elaborating. Singapore's Ministry of Transport, Temasek, Air India, Tata Sons and Tiong did not respond to emails seeking comment.

A Singapore Airlines spokesperson said its board would carefully consider any requests for additional capital from Air India, weighing the group's other capital requirements and the Indian airline's business strategy.

Tiong said he had also filed a question for oral answer in parliament on September 8, asking the transport minister whether losses from and the carrying amount in Singapore Airlines' foreign associates have been assessed against its capacity to provide essential transport services.