Temasek Backs Singapore Airlines Long-Term Investment in Air India Amid Funding Questions

Temasek, Singapore's state investor and the majority shareholder of Singapore Airlines, has backed the airline's decision to remain invested in Air India. The support comes as the Indian carrier faces growing scrutiny over its financial position. 

Air India has sought about $1.5 billion in fresh equity from Tata Sons and Singapore Airlines. Singapore Airlines owns 25.1% of Air India, with Tata holding the rest. 

Temasek Supports the Investment 

Juliet Teo, Joint Head of Portfolio Development at Temasek Singapore, said the investment was being looked at from a long-term perspective. She also pointed to the amount of work still involved in Air India's transformation. 

Temasek said rebuilding the airline involves operational and integration challenges that will take several years. It also noted that factors such as airspace disruptions, geopolitical developments and fuel price movements can affect the process. 

Funding Decision Still Open 

Temasek's comments did not confirm whether it would support any additional capital contribution from Singapore Airlines to Air India. 

Singapore Airlines said its board would carefully consider any request for more capital. Its decision would take into account the group's other funding requirements as well as Air India's business strategy. 

Air India's Financial Pressure 

The airline's turnaround has faced several hurdles since Tata took control of Air India in 2022. Pakistan's airspace restrictions on Indian carriers and disruptions linked to the US-Israel conflict with Iran have affected operations. 

The airline is also dealing with the fallout from last year's crash that killed 260 people. For the year ended March, Air India and Air India Express together reported losses of $2.33 billion, weighing on Singapore Airlines' profits. 

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Conclusion 

Temasek continues to support Singapore Airlines' long-term investment in Air India despite the carrier's financial challenges. Any fresh capital from Singapore Airlines will be considered by its board based on the airline's strategy and the group's wider capital needs. 

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