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SIA shares fall as Air India losses weigh on earnings, but group stands by long-term investment
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Singapore Airlines' shares were down around 2 per cent to $6.52 at closing on Nov 14, compared with their previous close of $6.65.
ST PHOTO: LIM YAOHUI
Summary
- SIA affirms commitment to Air India's transformation despite a widened loss, exacerbated by a June 2025 crash, but sees long-term potential.
- SIA highlights strong codeshare partnership and India's projected air travel growth of 5.6% annually, supporting its investment in Air India.
- Analysts have mixed views due to potential cash calls and persistent losses, balanced against access to India's underserved aviation market.
Published Nov 14, 2025, 03:35 PM
Updated Nov 14, 2025, 08:16 PM
SINGAPORE - Singapore Airlines will continue investing in Air India and remains committed to its long-term transformation, said the airline’s chief executive Goh Choon Phong on Nov 14.
He was speaking at a briefing on the company’s first half results in the six months to Sept 30.
Despite SIA reporting record revenues and achieving higher operating profit, which rose 0.9 per cent year on year to reach $803 million, net profit fell 67.8 per cent to $239 million over the period, due to lower interest income and its share of Air India’s losses.
This has raised concerns among analysts and investors about the carrier’s ability to sustain its earnings momentum.
SIA shares were down around 2 per cent to $6.52 at closing on Nov 14, compared with the previous close of $6.65.
The airline began accounting for associate Air India’s financial performance from December 2024, after Vistara was merged into the Indian flag carrier. But losses at Air India have since widened, exacerbated by a plane crash in June 2025 that killed 241 people on board in Ahmedabad.
When asked about its investment in Air India at the briefing, Mr Goh said: “All we say, and continue to say, is that we remain very committed to the transformation of Air India.”
He added that this is a long-term investment for SIA and it has no illusions about the challenges along the way.
Mr Goh noted during the briefing that SIA has built a strong codeshare partnership with Air India, giving its customers access to more than 30 additional points within India.
He also pointed to India’s strong air travel growth potential, noting that SIA began exploring partnership opportunities in the market more than a decade ago.
India is projected to become the world’s third-largest economy by 2030 or 2031, and it is now the world’s third-largest air transport market. Passenger traffic to, from and within India is expected to grow about 5.6 per cent each year from 2024 to 2044, SIA noted.
Thus, SIA’s investment in Air India enables it to participate directly in India’s high-growth domestic and international market, the company said.
In 2015, Vistara was created through a partnership between SIA and Tata. When India’s aviation sector later consolidated and Vistara was merged into Air India, SIA ended up with a roughly 25 per cent stake in the enlarged Air India.
“I don’t think anybody can dispute the potential of India, and Air India being one of the two major carriers based there,” Mr Goh said.
He added that Air India has also announced its five-year transformation plan, which SIA will continue to support.
“As strategic investors, we of course would like to do whatever we can to help Air India deal with the challenges and in its transformation journey. We have quite a lot of interactions and engagement with colleagues in Air India, and offer our expertise and help whenever needed and when appropriate,” he said.
When asked whether customer confidence in Air India had been hit after the air crash, Mr Goh said the data, such as the carrier’s load factor, does not indicate a loss of confidence. But he acknowledged that Air India has had a difficult time since the incident.
SIA chief financial officer Jo-Ann Tan noted that after the incident, Air India implemented a voluntary safety pause to accommodate additional pre-flight checks.
Since October, the airline has resumed its pre-pause operations.
Ms Tan added that Indian carriers have also been affected by the ongoing closure of the India-Pakistan airspace since April, as well as the airspace closures in the Middle East in June.
Mr Goh said: “All these factors have affected Air India’s performance so far, but we continue to have strong belief in the growth potential of India and Air India, and together with our committed fellow shareholders, like Tata, will continue to support the carrier’s transformation.”
Analysts were mixed on how long Air India would weigh on SIA’s outlook.
Ms Lorraine Tan, Morningstar director of equity research in Asia, said: “As Air India returned to full capacity on Oct 1, we expect better second-half earnings performance, particularly with routes to new destinations and improved seasonality.
“SIA does not expect further capital injections into Air India beyond the amount committed at this point in time.”
She added that SIA’s stake in Air India allows access to India’s fast-growing and underserved aviation market, which analysts continue to view positively over the medium term.
However, CGS International analyst Raymond Yap said SIA will have to consider the potential of Air India making a cash call.
Bloomberg reported on Oct 30 that Air India was seeking $1.47 billion in financial support from its shareholders, with SIA’s implied 25.1 per cent share at $369 million.
“Although SIA did not mention this in its earnings release, and the sum is modest relative to SIA’s cash and cash equivalents balance of $9.1 billion as at Sept 30, we think that SIA will still have to take this into consideration when deciding on the total annual dividends per share payouts,” said Mr Yap.
He added that the Air India losses were wider than expected and may be persistent.
Maybank analyst Eric Ong also said Air India is expected to remain a drag on SIA due to capacity reductions, foreign exchange volatility and years of transformational initiatives.
“Although SIA has indicated that there are no plans for additional capital injections at this stage, we believe future fund raising at Air India cannot be ruled out, which could either dilute SIA’s existing stake or require additional cash commitments,” he said.
OCBC analyst Ada Lim added that persistent or widening losses from Air India in the near term may also be an overhang on its share price.
“Nonetheless, we remain confident that SIA’s brand proposition, service quality and product innovation will allow it to navigate the volatility and transition from recovery to growth going forward.”
