Latest News

Singapore opposition legislator opposes Temasek funding to Air India

An opposition Singapore lawmaker urged against using state investor Temasek’s money to bolster?Air India after reports that the Indian carrier had?asked for $1.5 billion from owners Tata Sons, Singapore Airlines and Temasek, who are majority-owned by Temasek.

Kenneth Tiong of the Workers' Party, an opposition member of parliament, stated in a post on social media that since Singapore Airlines owned about 25% of Air India, and Temasek, in turn, owned most of Singapore Airlines, the request "was not only a private shareholder question."

I will not support or expect any future use of Temasek funds to support Air India through Singapore Airlines. "If Singapore Airlines wishes to continue its wager on Air India, they should do it on their own, not with Temasek’s help," he said.

He added that whichever of the two wrote the cheque, it would have a significant effect on Temasek, without going into further detail.

Singapore's Ministry of Transport and Temasek did not reply to emails asking for comment. Neither did Air India, Tata Sons, or Tiong.

Tiong also said that he filed a written question to the Transport Minister on September 8th, asking if the losses and carrying amounts in Singapore Airlines' associates abroad have been compared with its ability to provide essential transportation services.

Singapore Airlines' commercial decision is now being scrutinized by the political establishment in Singapore. The airline's 25,1% stake in Air India weighed down on its earnings, as Air India's losses increased during the multi-billion dollar turnaround. Tata Sons Chairman N. Chandrasekaran said that it could take up to 10 years for Air India to turn around.

Air India Express and its budget-arm Air India posted combined losses in excess of $2.33 Billion dollars for the year ending March. This is more than double what they reported the year before. Singapore Airlines has taken its share of the losses.

Air India will continue to require capital infusions over the next few years, according to a source with knowledge of the situation. Earlier this week.

Air India's future funding has been questioned before.

The Securities & Investors Association (Singapore), which held its annual general meeting in Singapore last month, asked if the Singapore Airlines board has set limits on the amount of capital that can be allocated to Air India and under what conditions it will approve additional capital.

Singapore Airlines didn't specify a limit in a response written on July 17. The company stated that its board would carefully consider any request, taking into consideration its other capital needs and Air India's?business strategy.

Air India is suffering from a number of factors, including the ban on Indian airlines flying into Pakistan, the disruptions in its international network caused by the U.S./Israeli conflict with Iran and the aftermath of a fatal crash that occurred last year. (Reporting from Abhijith Ganahapavaram, New Delhi; Additional Reporting by Xinghui Kok, Singapore; Editing Jamie Freed).

(source: Reuters)