A recent request by Air India for an additional $1.5 billion in equity funding from its primary owners, Tata Sons and Singapore Airlines (SIA), has sparked significant debate within Singapore's parliament. Workers’ Party MP Kenneth Tiong Boon Kiat publicly questioned the rationale behind Singapore’s continued financial involvement with the Indian carrier, especially given Air India's substantial losses.
Air India, along with its budget unit Air India Express, reported combined losses of $2.33 billion in the fiscal year ending March, more than double the previous year's figures. This financial performance forms the backdrop for the MP's strong opposition to the funding request.
Concerns Over Temasek's Involvement
Kenneth Tiong Boon Kiat highlighted that while Tata Sons holds a 75 percent stake in Air India and SIA owns approximately 25 percent, the issue extends beyond private shareholders. Temasek Holdings, a multinational investment firm owned by the Singaporean government, is the largest shareholder in Singapore Airlines. This connection means that any significant capital injection from SIA into Air India could indirectly involve government-linked funds.
“No one, least of all Singaporeans, owes Air India a living. 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 stated in a social media post.
The MP has formally filed a question for oral answer in the parliament's September 8 sitting, urging the Minister for Transport to address the matter directly.
Air India's Turnaround Challenges
The funding request is considered one of Air India’s largest publicly reported shareholder funding appeals, coming as the airline embarks on a multi-billion-dollar revamp, including fleet refurbishment. Tata Sons chairman N Chandrasekaran had previously indicated that Air India's turnaround could take up to a decade, a statement made prior to his reported stepping down from the role in February, partly linked to disagreements over the airline's losses. Adding to the complexity, SIA itself reported losses in the most recent quarter.
Sources indicate that discussions regarding the $1.5 billion request are ongoing, and no final decision has been reached. Air India has faced a series of operational challenges in recent years, including past disruptions to international networks and geopolitical events, contributing to its difficult financial trajectory.