Singapore Airlines defends Air India investment despite losses: ‘We know the market and how difficult it feels’

(SeaPRwire) –   Singapore Airlines’ investment in loss-making Air India contributed to a decline in the city-state’s flagship carrier’s profits last year, despite record revenue and passenger numbers.

SIA reported a 57.4% drop in net income to 1.2 billion Singapore dollars ($927 million) for its 2025 fiscal year, ending in March. Profits were reduced by a loss of 945 million Singapore dollars ($739 million) from SIA’s stake in Air India. The airline still achieved record revenue of $20.5 billion, driven by strong global demand for air travel. SIA and its low-cost subsidiary Scoot carried 42.4 million passengers.

“We have been operating within India for a long time, so we know the market and how difficult it feels,” said CEO Goh Choon Pong at a May 15 press briefing, following the release of the company’s earnings the day before. He added that the market still holds “tremendous potential,” citing a growing middle class set to surpass 800 million by 2047 and a proliferation of new airports.

SIA first entered the Indian market in 2013 through a joint venture with Tata Sons, establishing Vistara, a luxury carrier.

Tata later acquired the financially troubled state-owned Air India in 2022 and appointed Campbell Wilson, a long-time SIA executive and CEO of Scoot, as its CEO. The Indian company then merged Vistara into Air India, converting SIA’s 49% stake in Vistara into a 25.1% stake in the larger Air India group.

Despite a surge in outbound tourism, Air India recorded a record loss of $2.8 billion in its 2025 fiscal year, after a year of scrutiny following the AI171 crash in Gujarat, India, which claimed 260 lives. The airline has also lost its CEO: Wilson resigned in April but will remain in the role until a successor is appointed by Air India’s board.

“The airline is significantly reducing frequencies—particularly international flights but also domestic flights—while they reevaluate all their processes,” Goh stated. SIA has seconded team members to Air India to assist in transforming it into “a world-class carrier with an Indian heart.”

Air India has also faced pressure due to Pakistan’s decision to bar Indian airlines from accessing its airspace, following a brief conflict with India last year. This closure forces Indian carriers to take longer routes to Europe and the U.S., increasing flight times and jet fuel costs.

The Indian rupee has sharply depreciated against the U.S. dollar, making fuel and other imported goods more expensive. “Most of our expenditure, especially for fuel and aircraft, is in U.S. dollars, so these are definitely challenges,” Goh noted. (High U.S. tariffs and a widening trade deficit contributed to the rupee becoming Asia’s worst-performing currency last year.)

Rising fuel costs

Jet fuel prices have surged since the U.S. and Israel launched strikes on Iran in late February. Much of the Middle East’s oil exports remain blocked at the Strait of Hormuz, currently obstructed by Iran. In response, countries like China and South Korea have imposed export bans on refined fuel products, including jet fuel.

In a May 14 stock exchange filing, SIA warned that it has not yet fully experienced the impact of higher jet fuel prices caused by the Iran conflict and the closed Strait of Hormuz; these effects are likely to appear in the company’s upcoming quarterly results.

“In March, jet fuel costs more than doubled,” said CFO JoAnn Tan during the airline’s May 15 press conference. “However, because it only affected one month over a full year, jet fuel prices before hedging were still lower compared to last year.” SIA did not provide a forecast on how rising fuel prices might affect its future performance.

Air New Zealand projected its largest annual loss in four years on May 13, attributing it to higher fuel costs. Japan Airlines and All Nippon Airways (ANA) have also announced fuel surcharges for international flights booked in May and June. (Not all carriers are struggling: Hong Kong’s Cathay Pacific recently announced it would remove its emergency fuel surcharge.)

SIA does see one advantage from the Iran crisis: the airline will increase flight frequency between Singapore and four European destinations and launch a new service to Madrid. (Both Middle Eastern and European carriers are facing widespread airspace closures due to the Iran conflict.)

“We were able to capture some spillover traffic from Middle Eastern carriers on certain long-haul routes, particularly [on flights to and from] Europe, the U.S., and Australia,” said SIA chief commercial officer Lee Lik Hsin during the briefing.

Other Asia-Pacific airlines are also actively seeking to gain market share from underperforming competitors. Cathay Pacific is adding flights to Europe, while Qantas is expanding capacity to New Zealand.

Singapore Airlines shares rose 2.4% on May 15 but are still down 6.7% over the past 12 months.