Air India losses not a threat to Singapore Airlines services: S'pore transport minister

Mumbai: Singapore government on Tuesday said losses at Air India don't currently pose a threat to Singapore Airlines' ability to provide essential air services in the city-state, while defending the strategic rationale for its flag carrier's investment in the loss-making Indian airline. The government's assessment tracks Air India seeking about $1.5 billion in fresh equity from parent Tata Sons and Singapore Airlines, which owns 25.1% of the Indian carrier.

Transport minister Jeffrey Siow told Parliament that losses at a foreign associate would become a regulatory concern only if they materially constrained SIA's resources for its fleet, maintenance or network operations in Singapore.

"The relevant question is whether such losses, or anything else, reach the point of materially constraining the resources available for SIA's fleet, maintenance or network operations here," Siow said. "We are nowhere close to this scenario," he said, according to a document reviewed by ET.

"At present, there is no reason for us to doubt SIA's ability to deliver air services in Singapore," he said.

Also Read: Why Air India's funding call has come under political scrutiny in Singapore

The minister was responding to a question by Workers' Party MP Kenneth Tiong Boon Kiat on whether Air India's losses have implications for SIA's ability to provide essential transport services and whether they could trigger notification requirements under Singapore's Civil Aviation Authority of Singapore Act.

Siow said SIA became a designated operating entity under Act in April 2025 and that the Civil Aviation Authority of Singapore considers a range of factors, including the airline's financial health, when assessing its ability to operate essential services safely and reliably.

He rejected the suggestion that Singaporean taxpayers were effectively bearing the cost of the Air India investment. SIA, he said, funds its investments through own balance sheet and earnings and has over S$10 billion in cash reserves and over S$3 billion in undrawn credit facilities. Airline hasn't sought additional capital from shareholders. The minister set out the strategic case for SIA's investment in AI, arguing the Singapore carrier needs to look beyond its home market to sustain growth.

"To grow further, SIA must expand overseas, because there is a limit to how many people will ever fly to and from Singapore," said Siow.

He highlighted that AI gives SIA access to one of world's largest aviation markets by traffic and a hub for onward connections to Europe and the Gulf. The returns may take time to materialise, he said.