Singapore’s transport minister on Tuesday defended Singapore Airlines’ investment in Air India, saying the city state’s flag carrier must grow overseas because there is a limit to how many people will fly to or from Singapore.
Responding to a question in parliament, Minister Jeffrey Siow said the flag carrier was a listed company that funded investments from its own balance sheet and it had not sought further capital from shareholders.
The airline is majority owned by Singapore state investor Temasek.
Singapore Airlines’ 25.1 per cent stake in Air India has weighed on its earnings and been subject to political scrutiny as the Indian carrier’s losses widened during a multibillion-dollar turnaround that could take up to a decade.
Air India is also seeking about US$1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines.
“Many overseas investment returns will not necessarily emerge immediately. Whether its specific investment in Air India proves valuable is for [Singapore Airlines] and its shareholders to answer,” said Siow, adding the current assessment was that the airline’s ability to serve Singaporeans was not adversely affected.