Air India recently became a hot topic in Singapore’s Parliament.
It started when Workers’ Party MP Kenneth Tiong Boon Kiat filed a parliamentary question to the Transport Minister, due for an oral reply on September 8, 2026.
The trigger is that Air India has been mired in losses and is seeking about US$1.5 billion in fresh equity from its co-owners, Tata Sons and SIA, to fund its turnaround. Since SIA holds a 25.1% stake in Air India, maintaining that stake would mean contributing hundreds of millions of dollars. Temasek, in turn, owns more than 50% of SIA.
That’s what worried MP Tiong. He questioned whether Temasek’s money would end up footing the bill, and he strongly disagreed with the idea. He put it bluntly.
“No one, least of all Singaporeans, owes Air India a living. 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.”
To be clear, no decision has been made yet on whether SIA will give Air India more money.
The bigger question is how SIA ended up in this Air India mess in the first place.
Tata + SIA = Vistara
According to Channel NewsAsia’s timeline, the story starts as early as 1995, when Tata and SIA wanted to set up a full service airline in India. The plan was rejected because India passed a new law in 1997 barring foreign ownership of domestic carriers.
The law was amended in 2012, and India began allowing foreign airlines to hold up to 49% of Indian air transport companies.
The following year, SIA and Tata Sons set up a new airline called Vistara. SIA held 49% and Tata owned the rest. Over the years, SIA poured money in.
- 2013/14 saw S$4.9 million invested.
- 2014/15 saw S$25.7 million invested.
- 2017 brought more than S$100 million, more than twice what was initially planned.
- 2018/19 saw Tata and SIA inject a combined 40.2 billion rupees, about S$790 million.
- 2020, the Covid year, saw Tata and SIA inject 18.3 billion rupees, about S$340 million.
- 2021 saw a further 5.95 billion rupees, about S$110 million.
It’s understandable that starting a new airline needs major funding. What’s controversial is that during Covid, SIA was pumping money into Vistara while trying to save itself. SIA raised S$15 billion, and Temasek funded about S$12.2 billion of that. So indirectly, SIA funnelled some of Temasek’s money to a foreign carrier.
Vistara -> Air India
In 2022, Tata acquired 100% of Air India from the government and proposed merging it with Vistara. In exchange, SIA would get 25.1% of the enlarged Air India. From this point, Air India’s fate was tied to SIA’s.
At 25%, under accounting rules, this counts as “significant influence” without outright control, and SIA classifies Air India as an associate company. That means SIA’s share of Air India’s losses shows up directly in SIA’s own financial statements.
FY2025/26 was particularly painful. Air India delivered over S$800 million in losses to SIA, wiping out its gains in operating profit. What was meant to be a strategic investment in India’s growth turned into a drag on SIA’s financials.
The plot thickens. When the Vistara-Air India merger happened, SIA also invested about 20.585 billion rupees, or roughly S$362 million, in Air India.
On top of that, SIA agreed to provide up to another 50.2 billion rupees, or S$880 million, after the merger completed. So when Air India comes calling for more funding now, it isn’t new. It’s expected, and it was agreed to.
The only catch is that SIA never promised a blank cheque, and it will still review each funding request on its own merits.
Why India?
The next question is why India matters so much to SIA. Why not other markets?
The truth is SIA has tried other airlines and markets too.
Delta Air Lines (USA) and Swissair (Switzerland). In 1989, SIA formed a tripartite global alliance with the two carriers. As part of the deal, all three took a 5% cross equity stake in each other. The partnership fizzled and was dissolved in 1999, with SIA selling its shares.
Virgin Atlantic (United Kingdom). In 2000, SIA paid £600 million for a 49% stake in Richard Branson’s airline, hoping to gain a foothold in the lucrative transatlantic market between London and the US. The expected synergies never materialised. After years of underperformance, SIA sold the stake to Delta Air Lines in 2012 for just US$360 million, booking a significant loss.
Air New Zealand (New Zealand). SIA bought a 25% stake in the national carrier in 2000. A year later, Air New Zealand faced bankruptcy after its Australian subsidiary Ansett collapsed. When SIA refused to fund a massive bailout, the New Zealand government stepped in and diluted SIA’s stake to just 4.5%. SIA sold the remaining sliver in 2004, again taking a substantial loss.
Virgin Australia (Australia). To grab a share of the Australian domestic market, SIA bought an initial 10% stake in Virgin Australia in 2012, later raising it to 20%. When Covid wiped out global travel in April 2020, Virgin Australia collapsed into voluntary administration. SIA refused to join a rescue package and wrote off the investment entirely.
NokScoot (Thailand). SIA’s low cost arm Scoot held 49% of a joint venture with Thailand’s Nok Air, flying medium to long haul budget routes out of Bangkok. The airline struggled for years. In June 2020, SIA pulled the plug, refusing to inject further capital and voting to liquidate it.
SIA also tried to buy a stake in China Eastern Airlines in 2007 but was blocked by Chinese shareholders. Unlike India, where SIA could work with a local partner in Tata, SIA had no local backing to make China work.
SIA wants to grow, and the answer has to be overseas since Singapore is small. SIA relies entirely on international traffic through Singapore. It has adopted a multi hub strategy and picked India, the world’s third largest air transport market, as its “Second Hub”. SIA has given up on nearly every other foreign market, but it has held on to India. It genuinely sees it as the growth engine.
So the real question is how much more SIA is willing to pour into Air India, and whether this Second Hub strategy is even worth pursuing.
SIA’s investments in foreign airlines have all ended in losses. There’s not one successful case. The Air India saga isn’t unique, it’s the pattern. Maybe SIA should simply stop investing in foreign airlines.
SIA’s real strength is its brand. That brand commands a premium on air tickets, and that’s what makes SIA’s core business lucrative. Other airlines don’t have that halo. And if they did have it, they wouldn’t sell a stake to SIA in the first place. That’s the Catch 22.
Unless SIA has control over operations and brand positioning at the airlines it invests in, there’s no chance of SIA’s magic rejuvenating them. And which country would let SIA take a controlling stake in its domestic carrier? Unlikely. So SIA keeps ending up with stakes in mediocre or troubled airlines it has no power to turn around, except by pumping in more money.
That doesn’t sound like a good deal.
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