Workers’ Party MP Kenneth Tiong Boon Kiat opposed any future use of Temasek funds to support Air India through Singapore Airlines (SIA), which owns about 25% of the Indian carrier.
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Temasek Holdings–the Singapore government-owned multinational investment firm–is SIA’s largest shareholder. Tata owns the remaining 75% of Air India.
In a letter to Singapore transport minister Jeffrey Siow, Tiong asked whether Air India’s losses have been assessed against SIA’s capacity to provide essential transport services and whether they engage the notification duty attached to SIA’s designated status under the Civil Aviation Authority of Singapore Act.
He sought an oral answer in the September 8 parliamentary session. “This is not only a question for private shareholders,” he said. “Whichever of the two writes the cheque, it will have a significant impact on Temasek. 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.”
Temasek declined to comment. SIA and Air India did not respond to queries.
Tiong posted his letter to the minister on his social media page. He couldn’t be reached for comments on his mobile.
In a letter to Singapore transport minister Jeffrey Siow, Tiong asked whether Air India’s losses have been assessed against SIA’s capacity to provide essential transport services and whether they engage the notification duty attached to SIA’s designated status under the Civil Aviation Authority of Singapore Act.
ET BureauSOS Financing
The salvo was fired on the day Reuters reported that Air India has sought about $1.5 billion in fresh equity from Tata Sons and SIA. The funding is expected to be provided in parts, with SIA required to contribute its share for the proposed infusion to go through. Discussions are continuing and no decision has been taken, according to Reuters.
The potential capital call comes after SIA reported a first-quarter net loss, its first since 2022, weighed down by Air India’s poor numbers and higher jet fuel costs due to the US-Iran conflict, despite posting record revenue.
SIA’s two-year bet on Air India has already led to the airline booking operating losses of about S$1.3 billion ($780 million), down from S$2.02 billion a year earlier. The investment in November 2024 came just months before Air India’s Ahmedabad plane crash and Pakistan shutting out Indian carriers from its air space apart from rising fuel prices.
As part of consolidating its stakes, SIA’s management decided to fold Vistara, in which it had invested in 2013, into Air India besides contributing an additional S$822 million ($642 million) of capital in 2024. Last March, five months after signing the deal, Singapore Airlines was required to inject a further S$167 million into the business, bringing its total capital investment to S$989 million ($772 million).
The MP cited the Reuters report to say that Tata Sons chairman N Chandrasekaran had sought a longer period to turn Air India around. Campbell Wilson stepped down as Air India CEO earlier this year, forcing Chandrasekaran to take a more direct role. Tewolde Gebremariam, a former Ethiopian Airlines chief, was shortlisted as Campbell’s successor in August, days before Chandrasekaran himself decided not to seek reappointment as chairman of the group holding company for a third term.
Gebremariam was most recently selected to lead Pakistan International Airlines, a job he didn’t take.
Also Read: Air India seeks $1.5 billion from owners Tata Sons, Singapore Air as losses mount, sources say
Air pocket
The financial deterioration has complicated Tata’s effort to rebuild Air India after taking control in January 2022 following its privatization. Air India and Air India Express reported combined losses of about $2.33 billion in FY26, more than double that of the previous year, ET had reported. Last month, Chandrasekaran cautioned shareholders that the turnaround won’t be quick. In his statement accompanying Tata Sons’ FY26 annual report, he wrote: “Given where it began, Air India’s transformation must be seen as a five- to ten-year journey.”
Describing the problems facing Air India as a “perfect storm,” Chandrasekaran cited lingering component delays, legacy technology infrastructure and the need to build an upgraded technical workforce as key constraints. He also described airspace closures, West Asia conflict-driven fuel-price and currency pressures and the June 2025 AI171 crash as major external headwinds during the year.
The widening gap between projected and actual performance of some group units was among the factors behind the deferral of Chandrasekaran’s third-term reappointment during the February board meeting of the apex decision-making body of the group, according to people with knowledge of the matter. Chandrasekaran was expected to present a revival plan at the subsequent June board meeting to stem losses at the group’s new ventures. That’s a point on which Tata Trusts chairman Noel Tata has placed much emphasis and for which he has sought a detailed blueprint. Tata Trusts is the principal shareholder of the group.
The Indian authorities are yet to conclude their investigation into the Ahmedabad crash, but Air India has cut back its schedule to inspect its Boeing 787 fleet and increase pre-flight checks. Flights have also been curtailed because of the rising costs.
The latest intervention follows questions raised last month by the Securities Investors Association (Singapore), which sought clarity from SIA on its role in Air India’s turnaround, potential limits on further capital commitments and how the investment was being weighed against opportunities in other markets, including China.
SIA said in a written response ahead of its annual general meeting that its board would “carefully consider” any requests for additional capital from Air India, taking into account the group’s other capital requirements and Air India’s business strategy. It reiterated that Air India was a cornerstone of its long-term India plan, describing the investment as “a pillar” of its multi-hub approach. The stake gives SIA exposure to India’s domestic market and international traffic flows while complementing its Singapore hub, the airline said.
Last week, FT cited DBS analyst Jason Sum as saying, “I do not expect Air India to become profitable over the next few years… Any meaningful earnings contributions to Singapore Airlines are likely to remain several years away.”
The Singapore government may argue that, as an equity shareholder in Air India, SIA will rely on its own balance sheet and neither taxpayers nor Temasek will be on the hook, analysts said.