Hong Kong, Sept. 10 – Singapore Airlines‘ funding talks with Air India have intensified as the Singapore carrier prepares to demand tougher terms for any fresh equity injection into the loss-making Indian airline, according to people familiar with the matter. Backed by Temasek, Singapore Airlines is expected to seek greater management influence and stronger governance rights before approving additional Air India funding, with proposed conditions to be negotiated directly with majority shareholder Tata Sons. These terms could include expanded board voting power and clear requirements for Air India to reduce operating losses amid a challenging aviation turnaround.
Air India recently sought around 1.5 billion dollars in new capital from its owners after posting a 2.33 billion dollar loss for the year ended March, a result that has already weighed on Singapore Airlines’ profits. Tata Sons has approved a 1.1 billion dollar pro-rata infusion while Singapore Airlines holds the remaining 25.1 percent stake. The Singapore carrier currently has only one board seat occupied by its chief executive and limited formal control, though its holding allows it to block certain special resolutions under Indian company law.
Singapore Airlines stated that its board will carefully evaluate any request for extra capital after reviewing Air India’s strategy, group cash flow and other funding needs. The airline confirmed that India investments are financed solely from internal resources and reported 8.3 billion dollars in cash reserves plus substantial unused credit lines at the end of June. Temasek will neither supply the money itself nor intervene in the airline’s decisions regarding Air India.
The push for stricter safeguards reflects pressure on Singapore Airlines to justify further aviation investment after earlier overseas losses and Tata’s warning that the Air India turnaround may take up to a decade. Singapore Airlines aims to capture long-term India aviation growth while managing turnaround risks, and Temasek has previously supported similar Indian bets. The onus for setting performance targets and governance standards rests with Singapore Airlines rather than its state shareholder.