Singapore Airlines deepens role at Air India amid record losses

[DELHI] Singapore Airlines (SIA) is deepening its operational involvement in Air India, as the carrier battles record losses and recent safety lapses draw increasing concern, according to sources familiar with the matter.

SIA has moved some of its employees into Air India, placing its executives in key roles across flight operations, engineering and maintenance in recent months – areas where the Singaporean carrier has long been considered a global benchmark, said the sources, who asked not to be identified as they are not allowed to speak to the media.

While relying on its minority shareholder for operational support, Tata Group, which owns 74.9 per cent of Air India, is focusing on commercial, human resources, finance and information technology functions, the sources said.

The shift, the sources said, marks a notable escalation in SIA’s engagement since the deadly Dreamliner crash, moving it from a strategic partner to a far more hands-on presence inside India’s flag carrier. Singapore Airlines stepped up its involvement last year with engineering and has since then expanded across other functions at Air India.

“We have been working closely with our partner Tata Sons to support Air India’s transformation programme” since the Singaporean carrier became a significant minority partner in the carrier, a spokesperson for Singapore Airlines said. The representative declined to comment on specific queries on Air India’s finances and operations.

Spokespersons for Tata Sons, the group’s holding firm, and Air India did not comment on e-mailed queries.

The deeper role comes at a time when Air India’s revival, one of the most ambitious turnaround efforts in global aviation, is proving far more complex and costly than the Tata Group expected when it won the bid to acquire the airline from the Indian government in 2021.

With losses swelling to roughly US$2.4 billion last year, repeated regulatory lapses, and a series of external shocks disrupting operations, Singapore Airlines now has both the incentive and the urgency to step in.

Its own earnings have been hit by Air India’s performance, and the South-east Asian carrier is keen to check further deterioration of its 25.1 per cent stake. The airline earlier said that losses from associated companies, mostly from Air India, were S$178 million in the December quarter but that it’s “firmly committed” to working with Tata to support Air India’s transformation.

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The lack of visibility on when Air India can turn a profit is an issue of growing worry for Singapore Airlines, the sources said.

But poor financial performance is not the only challenge facing Air India. It’s contending with setbacks including aircraft flown without airworthiness certificates, European regulators flagging compliance issues, and the plane crash that forced the airline to cut services and triggered closer scrutiny of engineering practices.

Geopolitical disruptions, from the closure of Pakistani airspace to the conflict in the Middle East, have further inflated costs by forcing longer, more expensive routes at a time of surging jet fuel prices.

SIA CEO Goh Choon Phong and Tata Group chairman Natarajan Chandrasekaran met in Mumbai last week to discuss a funding road map and the search for a new CEO after Campbell Wilson announced his resignation, the Economic Times newspaper reported. BLOOMBERG