Singapore defends flag carrier's Air India bet, cites need to expand overseas

Singapore's government has defended Singapore Airlines' stake in Air India, telling parliament on Tuesday that the carrier needs to widen its footprint abroad to grow. According to Business Recorder, the remarks came after two weeks of public scrutiny over a call for roughly $1.5 billion in new equity from Air India's owners, Tata Sons and Singapore Airlines. Transport Minister Jeffrey Siow added that whether the investment pays off is for the company and its shareholders to decide.

Opposition lawmaker Kenneth Tiong had urged that Temasek funds not be used to support the Indian carrier, and parliament addressed the question on Tuesday. Temasek, which majority owns Singapore Airlines, later publicly backed the airline, which holds a 25.1% share in Air India. Prime Minister Lawrence Wong condemned online anti-Indian abuse on Sunday, after Senior Minister K. Shanmugam asked police on Saturday to examine racist comments.

Singapore Airlines said its India investments will be financed from internal resources, with board approval required. The Indian group's loss deepened to $2.33 billion in the year ended March, and the recovery may take as long as ten years. Siow stressed that the Indian carrier's losses are not automatically the liabilities of Singapore Airlines.