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Singapore MP opposes use of state investor Temasek's funds for Air India
Says Singapore Airlines can keep investing using its own resources
Air India seeking about $1.5 billion from Tata, Singapore Airlines, Reuters reported
NEW DELHI, Aug 27 (Reuters) - A Singapore opposition lawmaker has urged that state investor Temasek's money not be used to shore up Air India, after Reuters reported the Indian carrier had asked owners Tata Sons and Singapore Airlines, of which Temasek is the majority owner, for about $1.5 billion.
Kenneth Tiong, a member of parliament for the opposition Workers' Party, said in a social media post on Wednesday that because Singapore Airlines (SIAL.SI), opens new tab owns about 25% of Air India and Temasek in turn owns most of the Singapore carrier, the request was "not only a question for private shareholders."
"I will not support, nor expect, any future use of Temasek's funds to prop up Air India via Singapore Airlines. If Singapore Airlines wants to continue its bet on Air India, it should do so on its own two feet, and not on Temasek's," he said.
"Whichever of the two writes the cheque, it will have a significant impact on Temasek," he added, without elaborating..
Singapore's Ministry of Transport, Temasek, Air India, Tata Sons and Tiong did not respond to emails seeking comment.
A Singapore Airlines spokesperson said its board would carefully consider any requests for additional capital from Air India, weighing the group's other capital requirements and the Indian airline's business strategy.
Tiong said he had also filed a question for oral answer in parliament on September 8, asking the transport minister whether losses from and the carrying amount in Singapore Airlines' foreign associates have been assessed against its capacity to provide essential transport services.
The comments bring political scrutiny in Singapore to what has been a commercial decision for Singapore Airlines. Its 25.1% stake in Air India has weighed on its earnings as the Indian carrier's losses widened during a multibillion-dollar turnaround that Tata Sons Chairman N. Chandrasekaran has said could take up to a decade.
Air India and its budget arm Air India Express posted combined losses of $2.33 billion in the year to March, more than double the previous year. Singapore Airlines has booked its share of those losses.
Air India is expected to continue requiring capital infusions in the coming years, a source familiar with the matter told Reuters earlier this week.
It is not the first time the city-state's flag carrier has been queried about future funding for Air India.
Ahead of its annual general meeting last month, the Securities Investors Association (Singapore) asked whether the Singapore Airlines board had set capital allocation limits for Air India and under what circumstances it would approve additional capital.
In a written response on July 17, Singapore Airlines did not provide a limit. The company said its board would carefully consider any requests, taking into consideration its other capital requirements and Air India's business strategy.
Air India has been hit by Pakistan's airspace ban on Indian carriers, disruptions to its international network from the U.S.-Israeli war with Iran, and the fallout from a crash last year that killed 260 people.
Reporting by Abhijith Ganapavaram in New Delhi; Additional reporting by Xinghui Kok in Singapore; Editing by Jamie Freed
Says Singapore Airlines can keep investing using its own resources
Air India seeking about $1.5 billion from Tata, Singapore Airlines, Reuters reported
NEW DELHI, Aug 27 (Reuters) - A Singapore opposition lawmaker has urged that state investor Temasek's money not be used to shore up Air India, after Reuters reported the Indian carrier had asked owners Tata Sons and Singapore Airlines, of which Temasek is the majority owner, for about $1.5 billion.
Kenneth Tiong, a member of parliament for the opposition Workers' Party, said in a social media post on Wednesday that because Singapore Airlines (SIAL.SI), opens new tab owns about 25% of Air India and Temasek in turn owns most of the Singapore carrier, the request was "not only a question for private shareholders."
"I will not support, nor expect, any future use of Temasek's funds to prop up Air India via Singapore Airlines. If Singapore Airlines wants to continue its bet on Air India, it should do so on its own two feet, and not on Temasek's," he said.
"Whichever of the two writes the cheque, it will have a significant impact on Temasek," he added, without elaborating..
Singapore's Ministry of Transport, Temasek, Air India, Tata Sons and Tiong did not respond to emails seeking comment.
A Singapore Airlines spokesperson said its board would carefully consider any requests for additional capital from Air India, weighing the group's other capital requirements and the Indian airline's business strategy.
Tiong said he had also filed a question for oral answer in parliament on September 8, asking the transport minister whether losses from and the carrying amount in Singapore Airlines' foreign associates have been assessed against its capacity to provide essential transport services.
The comments bring political scrutiny in Singapore to what has been a commercial decision for Singapore Airlines. Its 25.1% stake in Air India has weighed on its earnings as the Indian carrier's losses widened during a multibillion-dollar turnaround that Tata Sons Chairman N. Chandrasekaran has said could take up to a decade.
Air India and its budget arm Air India Express posted combined losses of $2.33 billion in the year to March, more than double the previous year. Singapore Airlines has booked its share of those losses.
Air India is expected to continue requiring capital infusions in the coming years, a source familiar with the matter told Reuters earlier this week.
It is not the first time the city-state's flag carrier has been queried about future funding for Air India.
Ahead of its annual general meeting last month, the Securities Investors Association (Singapore) asked whether the Singapore Airlines board had set capital allocation limits for Air India and under what circumstances it would approve additional capital.
In a written response on July 17, Singapore Airlines did not provide a limit. The company said its board would carefully consider any requests, taking into consideration its other capital requirements and Air India's business strategy.
Air India has been hit by Pakistan's airspace ban on Indian carriers, disruptions to its international network from the U.S.-Israeli war with Iran, and the fallout from a crash last year that killed 260 people.
Reporting by Abhijith Ganapavaram in New Delhi; Additional reporting by Xinghui Kok in Singapore; Editing by Jamie Freed
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