Singapore Lawmaker Objects To Temasek Funds Being Used For Air India

A Singapore opposition lawmaker has said that state investor Temasek's money should not be used to support Air India, after Reuters reported that the Indian carrier had asked its owners, Tata Sons and Singapore Airlines, for $1.5 billion. Temasek majority-owns Singapore Airlines.

Kenneth Tiong, a member of parliament from the opposition Workers' Party, said in a social media post on Wednesday that since Singapore Airlines owns about 25% of Air India, and Temasek in turn owns most of Singapore Airlines, the funding 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," Tiong said. He added that whichever company ultimately provided the funds, it would have a significant impact on Temasek.

Singapore's Ministry of Transport, Temasek, Singapore Airlines, Air India, Tata Sons and Tiong did not respond to requests for comment. Tiong said he had filed a question for oral answer in parliament on September 8, asking the transport minister whether losses from Singapore Airlines' foreign associates have been assessed against its ability to provide essential transport services.

Mounting Losses at Air India

Singapore Airlines' 25.1% stake in Air India has weighed on its earnings, as the Indian carrier's losses widened during a turnaround that Tata Sons chairman N. Chandrasekaran has said could take up to a decade. Air India and its budget arm, Air India Express, posted combined losses of $2.33 billion in the year to March, more than double the previous year's losses. Singapore Airlines has booked its share of these losses.

Air India is expected to require further capital infusions in the coming years, the report added.

Ahead of its annual general meeting last month, the Securities Investors Association (Singapore) had asked whether Singapore Airlines' board had set capital allocation limits for Air India. In a written response on July 17, the airline did not specify a limit, saying its board would consider any request based on its own capital needs and Air India's business strategy.

Air India has faced multiple challenges recently, including Pakistan's airspace ban on Indian carriers, disruptions from the conflict involving the United States, Israel and Iran, and the aftermath of a crash last year that killed 260 people.