SIA’s ability to serve Singaporeans unaffected by Air India investment, minister tells WP MP

Singapore Airlines’ ability to provide air services in Singapore has not been affected by its investment in Air India, Transport Minister Jeffrey Siow told Parliament.

Siow was responding to Workers’ Party MP Kenneth Tiong, who asked whether losses from SIA’s foreign associates had been assessed against the airline’s capacity to provide essential transport services. Tiong also asked whether such losses, or a continuing pattern of them, could require SIA to notify the Civil Aviation Authority of Singapore under the relevant law.

Siow said SIA must report events or irregularities that could materially impede or impair essential services. But losses at a foreign associate would not automatically meet that threshold. “The relevant question is whether such losses or anything else reach the point of materially constraining the resources available for SIA’s fleet maintenance or network operations here,” he said.

“That is a judgment based on facts. We are nowhere close to this scenario. At present, there is no reason for us to doubt SIA’s ability to deliver air services in Singapore,” Siow added.

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The relevant question is whether such losses or anything else reach the point of materially constraining the resources available for SIA’s fleet maintenance or network operations here.

He said SIA’s core business had one of its strongest years, with record revenue, high operating profit margins and a record number of passengers. The airline owns 25.1% of Air India and has discussed the investment with shareholders. Siow said the partnership provides access to one of the world’s largest aviation markets by passenger traffic, as well as a strategic location for connections to Europe and the Middle East.

Scrutiny increased after a Reuters report cited sources as saying Air India was seeking another $1.5 billion in support from Tata Sons and SIA, months after posting a record annual loss. Siow said overseas investment returns do not necessarily appear immediately and that the value of the Air India deal is ultimately for SIA and its shareholders to determine.

He accused Tiong of drawing an “imaginary link” between SIA’s overseas investment and its ability to maintain services in Singapore. Tiong had asked what would happen if the deal went badly, whether Temasek would act as a backstop and what the implications could be for taxes and quality of life. Tiong also condemned racist comments that had become entangled with debate over the deal.

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That is a judgment based on facts. We are nowhere close to this scenario. At present, there is no reason for us to doubt SIA’s ability to deliver air services in Singapore.