Boeing787 10 Singapore
The losses Air India is incurring are hurting Singapore Airlines‘ financial fortunes for the six months ending September this year. The Singapore-based flag carrier has a 25.1 percent stake in Air India. The SIA Group began equity accounting for Air India’s financial performance from December 2024, following the full integration of Vistara into Air India.
In a media statement, Singapore Airlines said it reported a robust operating profit of (Singapore) $803M, driven by healthy passenger demand and lower fuel prices, mitigating a rise in non-fuel unit costs from inflationary pressures. However, it adds that the “share of losses from Air India and lower interest income drag down net profit.”
The statement adds that the SIA Group’s net profit for the first half fell by (Singapore) $503 million (-67.8 percent) to (Singapore) $239 million. It adds that interest income fell (Singapore) by $103 million due to lower cash balances and interest rate cuts. In comparison, the Group’s share of results of associated companies was (Singapore) $ 417 million lower year-on-year, notably reflecting Air India’s losses, which were not included in the previous year. These results are a far cry from 2023.
SIA, with its equity stake, has one board seat on AI, with Goh Choon Phong, the current SIA Chief Executive Officer, occupying that position.
The Singapore-based flag carrier had invested over Rs 63 billion in the recapitalization plan for the merged carrier. For fiscal 2025, AI’s revenue rose 15 percent to Rs 786.36 billion, but its losses increased to Rs 108.59 billion.
Air India is not a listed company, so it does not submit quarterly results, but it submits its results annually to the Central Ministry of Corporate Affairs.
Tata Sons and SIA owned Vistara earlier
Tata Sons and SIA previously owned Vistara, a carrier that was merged with Air India shortly after the government successfully divested Air India in 2021. Vistara began operations in January 2015. In Vistara, Tata Sons held a 51 percent stake, with the remaining 49 percent held by SIA. Indian law allows foreign airlines to hold a maximum 49 percent stake in an Indian carrier. At the moment, SIA is the only foreign airline that has a stake in an Indian carrier.
Third time lucky for SIA
SIA has been trying for decades to buy a stake in Air India. Its first attempt was in early 2000, when Air India was a standalone entity. At that time, too, SIA had tied up with Tata Sons for the buyout. Eventually, SIA decided to withdraw from the race, and many say that proved fortunate because a short while after SIA withdrew, the events of 9/11 happened and shocked the global aviation world. It was only in 2021, after a successful bid with Tata Sons, that SIA finally achieved its ambitions.
One of the main reasons Singapore wanted to buy a stake in Air India was that the outbound market from Singapore is limited. At the same time, India is a vast domestic and outbound aviation market. Air India currently enjoys a 27 percent market share in the domestic market. It is the only Indian operator to operate non-stop to and from India to several points in the United States, Canada, and Australia.
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