Singapore Airlines has firmly dismissed any speculation about disillusionment with its substantial investment in Air India, despite the Indian carrier's ongoing financial losses impacting its profitability. The Singaporean flag carrier maintains its unwavering commitment to Air India's ambitious transformation program.
Steadfast Commitment Amid Challenges
Chief Executive Goh Choon Phong made the company's position clear during a post-result analyst and media briefing on Friday. "We remain committed to the transformation of Air India. There is no disillusionment. It is a long-term investment that we are making, and we understand there will be challenges," Phong stated emphatically.
The Singapore Airlines executive now serves on the Air India board following the merger of Vistara—the joint venture between the Tata group and Singapore Airlines—into Air India in November 2024. This strategic move gave Singapore Airlines a 25.1% stake in the combined entity, with Tata Sons holding the majority stake of 74.9%.
Financial Impact and Strategic Perspective
The Singaporean national carrier experienced a significant 67.8% year-on-year drop in net profit to S$239 million for the April-September period. Company officials attributed this decline primarily to accounting losses from associated companies, including Air India, along with lower interest income.
Phong was quick to clarify the nature of these losses, emphasizing that "These are accounting losses and do not have a material impact on our cash flow. We continue to have one of the strongest balance sheets." This marks the first time Singapore Airlines is accounting for losses at the Indian carrier in its financial books.
For the year ended 31 March 2025, the Tata-owned airline posted concerning financial results despite a 15% rise in revenue to ₹78,636 crore. The consolidated entity, which comprises Air India, Vistara, Air India Express, and AIX Connect, saw its net loss widen by 48% to ₹10,859 crore year-on-year.
Transformation Program and Market Opportunities
Air India's comprehensive transformation program, initiated in September 2022, has now passed the halfway mark. The ambitious initiative seeks to overhaul every aspect of the business, including its fleet, customer experience, operations, and internal processes.
According to Singapore Airlines' investor presentation, the Air India investment enables the Singaporean carrier to participate directly in India's high-growth domestic and international market across both full-service and low-cost carrier segments. This strategic positioning allows Singapore Airlines to tap into one of the world's fastest-growing aviation markets.
Singapore Airlines has invested over ₹6,300 crore in the merged airline's recapitalization plan, demonstrating the depth of its financial commitment to the partnership.
Operational Challenges and Future Outlook
Phong highlighted that Air India faced significant challenges in 2025 that were beyond its control, including the fatal Ahmedabad crash in June. The tragedy necessitated a "safety pause" that resulted in capacity cuts as aircraft were grounded for checks and maintenance.
This safety measure significantly shrank Air India's operational fleet and slowed international and long-haul operations. The restoration process began only in October, according to Phong's comments.
Additional operational challenges included airspace closures in Pakistan and West Asia, which particularly impacted long-haul routes. These closures resulted in increased fuel consumption and higher operational costs. Air India's chief executive, Campbell Wilson, had earlier warned that a continued closure of Pakistan airspace for a year could result in ₹4,000 crore of losses.
Despite these challenges, Phong confirmed that customer confidence in Singapore Airlines remains intact following the Ahmedabad crash. He also noted that Singapore Airlines has maintained "lot of interaction and engagement with Air India" and has been "helping out whenever needed."
When questioned about potential stake increases or further capital infusion into the Indian carrier, the CEO maintained that "These are discussions between shareholders." He emphasized the strong, engaging relationship between the partners and the absence of any concerns about the level of interaction and cooperation.
