Singapore Airlines’ investment in Air India is facing another setback as the Indian carrier continues to struggle with heavy losses, negative operating cash flow and the high costs of its turnaround. The carrying value of Singapore Airlines’ 25.1% stake fell to S$799.9 million as of September 30, 2026, down from S$2.09 billion in March 2025, highlighting the financial strain of its bet on India’s aviation market.
Air India’s losses are also affecting Singapore Airlines’ own earnings. The Singapore carrier recorded a share of S$361.7 million in losses from Air India during the first half of FY27, even as both shareholders, Singapore Airlines and Tata Sons, continue backing the airline’s long-term transformation.
Singapore Airlines’ Air India Stake Value Falls by More Than Half
Singapore Airlines (SIA) initially invested in Air India as part of a strategic partnership with the Tata Group. The deal gave the Singapore carrier a 25.1% stake in the Indian airline, while Tata Sons retained majority ownership.
However, the investment has lost substantial value as Air India’s financial performance has remained weak.
According to SIA’s interim financial disclosures, the carrying value of its investment declined to S$799.9 million at the end of September 2026. It stood at S$1.13 billion at the end of March 2026 and had reached a peak of S$2.09 billion in March 2025.
| Reporting period | Carrying value of SIA’s Air India investment |
|---|---|
| March 2025 | S$2.09 billion |
| March 2026 | S$1.13 billion |
| September 2026 | S$799.9 million |
The carrying value represents the investment’s accounting value on SIA’s balance sheet. It should not be confused with the market value of a freely traded shareholding, because Air India is not publicly listed.
The latest reduction also comes after SIA indicated in July that it did not expect further impairment of its investment. The subsequent decline highlights the continuing financial uncertainty surrounding the Indian carrier.
Air India Losses Continue to Weigh on Singapore Airlines
The financial impact of Air India is visible in Singapore Airlines’ latest results.
SIA reported that its share of losses from Air India amounted to S$361.7 million in the six months ended September 30, 2026. This compared with S$429.5 million in the corresponding period a year earlier.
The reported share of losses declined by approximately 16%. However, this should not automatically be interpreted as evidence that Air India’s underlying business has improved by the same amount.
Singapore Airlines said the reduction was primarily attributable to the reversal of certain provisions made in previous years. The accounting adjustment affected the amount of losses recognised by SIA.
Based on its 25.1% ownership, Air India’s estimated losses for the first half of FY27 were approximately ₹10,500 crore to ₹10,800 crore, depending on the exchange rate and accounting adjustments used.
The scale of these losses demonstrates how difficult it has been for Air India to move towards profitability despite extensive investment in its fleet, network and customer experience.
Air India Reports ₹22,238 Crore Loss in FY26
Air India’s financial performance deteriorated sharply in FY26.
The airline reported a consolidated net loss of ₹22,238 crore, more than double the ₹10,859 crore loss recorded in FY25.
Revenue also declined, falling to ₹70,086 crore from ₹76,754 crore in the previous financial year.
| Financial metric | FY25 | FY26 |
|---|---|---|
| Revenue | ₹76,754 crore | ₹70,086 crore |
| Net loss | ₹10,859 crore | ₹22,238 crore |
| Operating cash flow | ₹5,447 crore | Negative ₹1,790 crore |
One of the most concerning developments was the reversal in operating cash flow.
Air India generated positive operating cash flow of ₹5,447 crore in FY25. In FY26, it reported negative operating cash flow of ₹1,790 crore.
Negative operating cash flow means the airline’s core operations consumed cash rather than generating it during the period. This creates additional pressure because the company must continue funding aircraft, maintenance, employees, fuel, airport operations and other expenses.
The combination of higher losses and weaker cash generation makes the turnaround more challenging.
Why Air India’s Turnaround Is Taking Longer
Air India is undergoing one of the largest transformations in India’s aviation industry.
After its return to the Tata Group in January 2022, the airline began investing heavily in aircraft, cabin upgrades, technology, customer service and network expansion.
The company also merged Vistara into Air India in November 2024, combining the operations of two full-service carriers.
However, transforming an airline of this scale involves substantial costs and operational complexity.
Some of the major challenges include:
- Fleet modernisation: Air India has committed to major aircraft orders and is upgrading existing aircraft, requiring significant capital expenditure.
- Aircraft retrofitting: Older aircraft need new cabins, seats, entertainment systems and other improvements. The process has been affected by supply-chain constraints.
- Higher fuel expenses: Jet fuel is one of the largest operating costs for airlines, making profitability vulnerable to international oil-price movements.
- Currency depreciation: A weaker rupee increases the domestic cost of aircraft leases, maintenance, fuel-related expenses and other dollar-linked payments.
- Airspace restrictions: Pakistani airspace restrictions have forced some international flights to take longer routes, increasing fuel consumption and operating costs.
- Integration expenses: Combining Air India and Vistara has required work across technology, employees, aircraft, customer systems and operating procedures.
These factors have delayed the airline’s progress towards sustainable profitability.
Singapore Airlines Faces Pressure From Its Own Financial Results
Air India’s losses are not the only challenge facing Singapore Airlines.
SIA reported a 44% year-on-year decline in net profit to S$134 million in the first half of FY2026-27, compared with S$239 million in the corresponding period last year.
Revenue increased 16.8% to S$11.3 billion, supported by passenger and cargo demand. However, total expenditure rose by more than 20% to S$10.73 billion.
Fuel costs were a major contributor. Net fuel costs increased to S$3.97 billion from S$2.55 billion a year earlier.
The company said average jet fuel prices increased 86.7% year-on-year, reflecting the impact of the Middle East conflict.
| Singapore Airlines metric | H1 FY27 | Year-on-year change |
|---|---|---|
| Revenue | S$11.3 billion | +16.8% |
| Total expenditure | S$10.73 billion | +20.9% |
| Operating profit | S$569 million | -29.1% |
| Net profit | S$134 million | -43.9% |
| Share of Air India losses | S$361.7 million | Lower than previous year |
The results show that SIA is facing cost pressures across its own operations while also absorbing losses from its Indian investment.
Although its overall business remains supported by international passenger and cargo demand, the Air India exposure has become an important concern for investors.
Why Singapore Airlines Is Still Backing Air India
Despite the financial challenges, Singapore Airlines has not abandoned its investment.
The reason is India’s long-term aviation growth potential.
India is one of the world’s largest and fastest-growing aviation markets. Rising incomes, increasing international travel, expanding domestic connectivity and the growth of business travel offer significant opportunities for airlines.
Air India also provides SIA with access to an extensive domestic network, international traffic rights and airport slots that would be difficult for a new airline to build independently.
The Indian carrier could eventually become an important connecting hub for passengers travelling between India, Southeast Asia, Europe, North America and other international destinations.
SIA’s investment is therefore part of its broader multi-hub strategy. The company sees Air India’s network as complementary to its Singapore hub.
However, this is a long-term investment thesis. The opportunity will generate meaningful returns only if Air India can improve its operations and convert its scale into sustainable profits.
New Air India CEO Focuses on Revenue Growth and Cost Reduction
Air India’s new chief executive and managing director, Tewolde Gebremariam, took charge on October 1, 2026.
The former Ethiopian Airlines chief is overseeing the next phase of the airline’s transformation, with an emphasis on financial discipline and operational efficiency.
Singapore Airlines outlined several initiatives being pursued by the new management in its November 12 presentation.
These include:
1. Network restructuring
Air India is rebalancing services between Mumbai and Delhi and developing Bengaluru as a third hub. The strategy is intended to improve connectivity and reduce the impact of restrictions on Pakistani airspace.
2. International revenue growth
The airline is looking to diversify its traffic mix and increase revenue from international markets. This could reduce its exposure to fluctuations in the Indian rupee and strengthen its global customer base.
3. Cargo expansion
Air India is seeking to expand its cargo business, including plans to convert passenger aircraft into dedicated freighters.
4. Lower operating costs
The airline is integrating corporate services and resources across Air India and Air India Express to reduce duplication and improve coordination.
5. Employee-led cost savings
A dedicated cross-functional team has been established to identify savings opportunities. The company has also introduced an internal initiative called PRABHAV – The Value Creator Award to encourage employees to suggest ways to improve productivity and generate additional revenue.
The initiatives indicate a shift towards improving financial performance alongside the airline’s longer-term fleet and network expansion.
Air India Could Need More Capital From Its Shareholders
The scale of the turnaround means Air India may require additional funding.
Reuters reported in August 2026 that the airline had sought approximately $1.5 billion in fresh equity funding from its shareholders.
Any additional investment would require Tata Sons and Singapore Airlines to consider their respective capital commitments.
SIA has previously said that future funding requests would be assessed on a case-by-case basis, taking into account its wider investment priorities and Air India’s business strategy.
The question is becoming increasingly important because SIA has already absorbed substantial losses from the investment.
Further capital could help Air India fund its transformation, but it would also increase the amount of money at risk if profitability remains out of reach.
The Bigger Picture
Singapore Airlines’ Air India investment illustrates the difficulty of turning around a large legacy airline in a highly competitive and capital-intensive industry. India’s growing aviation market offers significant long-term potential, but the cost of building a globally competitive airline is substantial. Aircraft purchases, maintenance, fuel, airport infrastructure, technology and customer-service improvements require years of investment before they can translate into consistent profits.
For Singapore Airlines, the decision to remain invested reflects a bet on India’s future aviation demand rather than Air India’s current financial performance. The investment could eventually strengthen SIA’s international network, but continued losses and possible funding requirements increase the financial risk. The success of the partnership will depend on whether Air India can improve its cash generation, reduce operating costs and build a profitable global network.
Looking Ahead
Air India is entering another phase of its transformation under Tewolde Gebremariam, with management focusing on revenue growth, cost savings, network restructuring and closer coordination with Air India Express. These measures could improve the airline’s financial performance over time, but the scale of the losses and negative operating cash flow show that a quick turnaround remains unlikely. Singapore Airlines has reiterated its commitment to supporting the business, while recognising that the process will take time.
Investors will closely monitor Air India’s future financial performance, the possibility of additional shareholder funding and progress in reducing operating losses. The decline in SIA’s carrying value to S$799.9 million demonstrates how much the investment has been affected by the airline’s financial difficulties. Whether the long-term bet pays off will ultimately depend on Air India’s ability to turn its large network, brand and market position into sustainable profitability.
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