New Delhi, Sep 5 (IANS) The Singapore government will not intervene in any decision Singapore Airlines (SIA) makes regarding its investment in Air India, Senior Minister K. Shanmugam said on Saturday amid reports that the Indian carrier is seeking fresh financial support from its shareholders, as per multiple reports.
Speaking to reporters, Shanmugam said SIA has the responsibility to assess its investment in Air India based on the airline’s long-term growth prospects and profitability.
“It is a principle of the Singapore government not to intervene in individual investment decisions or apply political pressure,” Shanmugam said.
He further noted that directing corporate investment decisions would undermine commercial discipline and risk politicising business judgments.
The comments come after reports that Air India is close to securing about Rs 10,000 crore ($1.1 billion) in financial support from its shareholders, Tata Sons and Singapore Airlines.
According to them, the funding would be linked to performance milestones and disbursed in instalments.
The contribution would be proportionate to ownership levels with Tata Sons holding 74.9 per cent of Air India and Singapore Airlines owning the remaining stake.
In addition, Air India has faced a challenging period marked by a fatal Boeing 787 Dreamliner crash, restrictions stemming from the closure of Pakistani airspace to Indian carriers and disruptions linked to conflict in the Middle East that have increased operating costs and affected travel demand.
Earlier in July, SIA said it is seeing tangible progress in Air India’s transformation and the Indian carrier continues to be a key part of its long-term multi-hub strategy despite the challenges that the Tata Group airline was facing.
The remarks were made while responding to shareholder and investor queries.
Responding to the query, SIA said it had undertaken a formal impairment assessment after identifying indicators that warranted a review but concluded that no write-down in Air India was necessary.
–IANS
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