A 'long game': Singapore Airlines committed to Air India despite record US$2 billion loss, says CEO
"We have never had any illusion that it is an easy path," says CEO Goh Choon Phong on SIA's stake in Air India.
A Singapore Airlines Airbus A380-800 aircraft takes off from Zurich airport on Apr 9, 2019. (File photo: Reuters/Arnd Wiegmann)
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SINGAPORE: Air India’s transformation is a “long game” with “no shortcut”, and Singapore Airlines remains committed to supporting it, SIA CEO Goh Choon Phong said at a results briefing on Friday (May 15).
Singapore’s flag carrier group owns a 25.1 per cent stake in Air India, which reported a record US$2 billion loss for the last financial year and has been under scrutiny since a plane crash that killed 260 people in 2025.
Facing questions about the future of SIA’s stake, Mr Goh spent a significant part of the briefing explaining the group's position.
“We have never had any illusion that it is an easy path. Way back when we started the joint venture with our partner Tata Sons to set up Vistara, we knew at that point in time that it is a long game,” he said.
Vistara Airlines started flying in 2015 and merged into Air India in 2024, with SIA investing S$360 million (US$281.5 million) as part of the transaction.
MULTI-HUB STRATEGY
Mr Goh pointed to SIA's "multi-hub strategy" as essential to the group's long-term growth, constrained as it is by physical limitations and a small home market.
“Even with Terminal 5, at some point in time, we know that that capacity will be used up. Fundamentally, we are in a small market with no domestic operations,” he said.
This was evident during the COVID-19 pandemic, when border closures left SIA – unlike airlines with domestic networks – limited to cargo operations.
These factors led SIA to look at creating a new engine of growth in the longer term, said Mr Goh.
India is currently the world’s third-largest air transport market, but with far fewer aircraft in operation than the two largest markets – the United States and China.
Its middle class is expected to double to 864 million people by 2047, accompanied by rising disposable incomes and planned expansions in airport infrastructure and commercial fleet sizes.
“If you look at India today, I don’t think there’s any question about its growth potential,” said Mr Goh.
AIR INDIA’S CHALLENGES
Air India faces two industry-wide challenges: supply chain disruptions delaying fleet renewal and cabin retrofitting, and the Middle East crisis, Mr Goh said.
On top of that, it faces three problems specific to the airline: Pakistan's closure of its airspace to all Indian carriers, the crash of flight AI171 which prompted a voluntary safety pause that reduced flight frequencies, and the depreciation of the Indian rupee against the US dollar.
“These are certainly headwinds, but these are all external factors,” said Mr Goh, who highlighted improvements in Air India's customer loyalty and satisfaction ratings.
“We are committed to support Air India in its transformation efforts, but we're not alone,” he said, adding that controlling shareholder Tata Sons is equally committed.
“We want to make Air India … a world-class carrier and airline with an Indian heart.”
At the Q&A, executives declined to say how much capital SIA is willing to inject into Air India, describing this as a matter to be discussed with shareholders. On manpower support, two SIA employees have been seconded to Air India as chief operations officer and chief of engineering.
Asked how long shareholders must wait for a turnaround, Mr Goh said the key was assessing whether Air India is making structural progress and whether the factors weighing on its performance are internal or external in nature.
FUEL SUPPLY AND FARES
SIA was also asked about possible further airfare hikes in response to fuel cost pressures from the Middle East crisis. Executives remained non-committal, saying that “airfares are a function of supply and demand”.
“We want to price at a point that customers are still willing to buy, so we will have to watch the market carefully,” said chief commercial officer Lee Lik Hsin.
The group has said fare adjustments across SIA and Scoot's networks do not fully offset the rise in jet fuel costs – its single largest expense. Its FY2025/2026 results capture only one month of fallout from the crisis, which flared up on Feb 28. The full impact is expected to feed through to FY2026/2027.
SIA on Thursday reported a 57.4 per cent drop in annual profit to S$1.18 billion for FY2025/2026.
The decline was largely driven by the absence of a S$1.1 billion one-time gain from the Vistara integration recorded in the year-ago period, compounded by losses from Air India.
On fuel supply, chief operations officer Tan Kai Ping said supply is stable across the network in the near term, but that there is no long-term visibility given the "very volatile" situation.
“The first thing that will happen when fuel supply runs short will be fuel rationing at airports,” he said, noting that this is not the case now.
Mr Goh said SIA has taken a different approach from other airlines that have cut capacity since the Middle East conflict began.
It has cut services to Dubai and postponed the launch of services to Riyadh, but announced additional capacity and frequency on other routes – particularly in Europe, where its network has grown around 13 per cent compared to before the start of the war against Iran.
“We are in a position where we don’t need to cut capacity,” said CCO Mr Lee. “Our financial position is strong, and therefore we are actually growing rather than cutting capacity.”
Editor's note: An earlier version of this article stated that SIA had postponed the launch of services to Jeddah, which was the information provided at the briefing. The airline has subsequently said that the postponement applies to Riyadh, not Jeddah.
