Singapore Airlines (SIA) is facing a major financial setback from its investment in Air India, with the Indian carrier recording losses of about S$945 million in the year to March 2026.
The development comes less than two years after SIA acquired a 25 per cent stake in Air India as part of a major partnership with India’s Tata Group.
The investment was initially viewed as a long-term opportunity for SIA to gain exposure to India’s rapidly expanding aviation market. However, a series of unexpected challenges have since placed significant pressure on Air India’s finances and operations.
Air India investment hit by a series of setbacks
SIA completed its 25 per cent investment in Air India in November 2024, with Tata Sons retaining the remaining 75 per cent ownership.
The Singapore carrier had already been involved with Tata as an adviser when the conglomerate was exploring its acquisition of Air India. The partnership eventually evolved into a significant investment, with SIA providing financial support as the airline embarked on an ambitious transformation programme.
SIA reportedly injected around S$822 million into Air India initially, followed by another S$167 million in March 2025. The total capital contribution highlights the scale of the Singapore airline’s commitment to the Indian aviation market.
However, the timing of the investment proved particularly difficult.
Fatal crash, airspace restrictions and higher fuel costs
Air India’s troubles intensified following a fatal plane crash in June 2025 involving a flight departing India for London. The accident became one of the most serious setbacks for the airline as it was attempting to rebuild its reputation and modernise its operations.
Air India also faced disruption after Pakistan closed its airspace to Indian airlines in April 2025. The restrictions affected flight routes and forced carriers to make operational adjustments, increasing travel distances and adding pressure to airline costs.
The wider aviation industry has subsequently faced another major challenge in 2026, with elevated jet fuel costs putting additional strain on airlines’ operating expenses.
These developments have made Air India’s turnaround considerably more difficult, particularly as the carrier attempts to modernise its fleet, improve customer service, strengthen its operational systems and integrate its various businesses.
SIA remains focused on long-term potential
Despite the substantial losses, SIA has continued to defend its strategic partnership with Tata Sons and its investment in Air India.
An SIA spokesperson said the airline has been working closely with Tata Sons to support Air India’s transformation and provide expertise where required.
The Singapore carrier’s position is that the partnership should be viewed from a long-term perspective rather than solely through its short-term financial performance.
Air India has significant growth potential because of India’s enormous domestic aviation market and the country’s expanding international travel demand. The airline is also seeking to strengthen its position as a major international carrier connecting India with destinations across Asia, Europe, North America and other regions.
For SIA, the investment could eventually provide access to a much larger aviation market while creating opportunities for cooperation between the two airlines.
However, the nearly S$1 billion loss recorded by Air India demonstrates the financial risks involved in transforming a large legacy airline.
A difficult start to SIA’s strategic partnership
The investment has therefore become a test of SIA’s willingness to commit capital to a long-term international expansion strategy.
While the financial performance has been disappointing so far, Air India’s transformation is expected to take years rather than months. The airline is dealing with fleet upgrades, operational restructuring, network changes and the integration of its various aviation businesses.
SIA has indicated that its priority remains supporting Tata Sons in unlocking Air India’s long-term value.
Whether that strategy ultimately pays off will depend on Air India’s ability to improve its financial performance, strengthen operations and compete more effectively in India’s increasingly competitive aviation market.
For now, however, the partnership has delivered a difficult beginning, with Air India’s losses approaching S$1 billion less than two years after SIA made its high-profile investment.