Singapore Airlines reaffirms 25.1% Air India stake will be funded internally, says investment not affecting core services

The Singapore Airlines (SIA) on Tuesday said its 25.1% stake in Air India will continue to be funded through internal resources.

The airline’s statement came in response to opposition Workers’ Party MP Kenneth Tiong asking in Singapore’s Parliament whether losses from SIA’s foreign associates had been assessed against its ability to provide essential transport services.

Its investments in India are “subject to board approval and its disciplined capital allocation framework”, Channel News Asia reported, quoting the airline.

An SIA spokesperson said the company has “one of the strongest financial positions in the airline industry”, with SGD 10.48 billion ($8.27 billion) in cash reserves as of June 30. This includes SGD 9.10 billion in cash and bank balances and SGD 1.38 billion in fixed deposits.

Vistara’s consolidation with Air India in 2024

SIA set up Vistara in 2013 as a joint venture with Tata Sons. After Vistara was consolidated into Air India in November 2024, SIA retained a 25.1% stake in the enlarged Air India Group.

The Air India Group has less than $3 billion in current debt obligations, referring to those due within the next 12 months, and these are well covered by its cash reserves, an SIA spokesperson said.

SIA’s debt primarily comprises fixed-rate notes, lease liabilities and loans. The airline also has access to SGD 3.24 billion in committed lines of credit, which remain undrawn.

“SIA also has access to SGD 3.24 billion in committed lines of credit, all of which remains undrawn,” the spokesperson said. The spokesperson added that any request for additional capital would be assessed under the group’s capital allocation framework, taking into account Air India’s business strategy, SIA Group’s operating cash flow and its own investment requirements for new aircraft and products.

“The Air India investment receives full attention of the SIA board,” the spokesperson added.

Investment through SIA’s internal cash resources

SIA had said in 2022, when it and Tata Sons announced the merger of Air India and Vistara, that it would fully fund the investment through its internal cash resources.

According to media reports last month, Air India is seeking an additional $1.5 billion in support from its owners, Tata Sons and SIA, only months after reporting a record annual loss.

Addressing Singapore’s Parliament on Tuesday, the island nation’s Transport Minister Jeffrey Siow said SIA’s investment in Air India has not affected the airline’s ability to serve Singaporeans.

The airline is "nowhere near" a situation in which losses or other factors have materially constrained resources available for fleet maintenance or network operations in Singapore, he said.

(With PTI inputs)