Temasek Backs Singapore Airlines' Investment in Air India Amid $1.5 Billion Funding Request

Air India’s request for about US$1.5 billion in fresh equity from owners Tata Sons and Singapore Airlines was ‌first reported by Reuters this week. Singapore Airlines owns 25.1 per cent of India’s second-largest airline, with the rest owned by Tata.

News of the funding request prompted Kenneth Tiong, a lawmaker from Singapore’s opposition Workers’ Party, to urge that Temasek’s funds not be used to shore up the Indian carrier.

Singapore’s Business Times also ran a commentary arguing that Singapore Airlines could not realistically ⁠exit its Air India stake, with Tata the only plausible buyer. It questioned what its 25.1 per cent holding ‌offered beyond a board seat and a share of the losses, while saying the strategic logic of the investment still held.

In a letter to the newspaper ‌responding to that commentary, Juliet Teo, joint head of portfolio development at Temasek Singapore, said ⁠Temasek viewed Singapore ⁠Airlines’ decision to invest in Air India from a long-term perspective and was supportive of it.

The letter said the transformation of ‌Air India involved complex, multi-year operational and integration challenges, with outcomes shaped by industry developments and external factors such as airspace disruptions, geopolitical ‌developments and ‌fuel price volatility.