SIA's Air India investment internally funded, not paid for by Singaporeans: Jeffrey Siow

Singapore Airlines' (SIA) investment in Air India is funded from its own internal earnings, not by Singaporeans as Workers' Party (WP) MP Kenneth Tiong had publicly insinuated, said Minister for Transport Jeffrey Siow in Parliament on Tuesday (Sept 8).

He was responding to both a parliamentary question filed by the first-term Aljunied MP, and his public statement — expressing concerns in SIA's investment.

The WP MP had asked the transport minister whether SIA's losses from, and carrying amount in its foreign associates, have been assessed against the airline's capacity to provide essential transport services.

He also asked if such losses would trigger SIA's notification duty prescribed under the Civil Aviation Authority Act of Singapore, as a designated operating entity.

No doubt in SIA's ability to deliver air services

Responding to Tiong's question, Siow stressed that the airline's status as a designated operating entity is not a financial reporting rule.

Instead, the law — introduced in April last year — is intended to prepare Singapore for extreme scenarios and guard against the risk of malicious actors gaining control of and adversely influencing key transport entities in the Republic.

And on the airline's ability to deliver air services in Singapore, Siow said that the relevant question is whether any losses has reached the point of materially constraining its resources.

"That is a judgement based on facts, and we are nowhere close to this scenario," the minister highlighted.

He added: "At present, there is no reason for us to doubt SIA's ability to deliver air services in Singapore."

He pointed out that SIA's core business had one of its strongest years, posting record revenue, high operating profit margins, and a record number of passengers carried.

No funding requests for 54 years except during Covid-19

In his supplementary question, Tiong stated that while he supports ability to make its own decisions, he will not support any further cash infusions from Temasek.

He noted that Temasek, whose capital is part of Singapore's past reserves, had underwrote the airline's $8.8 billion recapitalisation in 2020, during the Covid-19 pandemic.

"And this House was told the Government would provide more direct support if necessary. If Air India goes wrong, will the Government rule out doing so again?" the MP asked.

He cited Indigo's present share of air services market in India and the possibility of two airport operators potentially becoming airline operators as examples of risks.

"We ask because through the reserves, Singaporeans are SIA's stakeholder of last resort, and the stakeholder of last resort needs to know where the line is."

The national carrier has not sought any funding from Temasek apart from during Covid-19, the transport minister said, adding that the situation then was "fundamentally different".

"Aviation was at a standstill. Flights were grounded all across the world. Passenger traffic through Changi had fallen by more than 90 per cent and SIA had to cut its scheduled capacity by 96 percent — SIA's incoming revenue was almost zero, and was losing $400 million a month — 4.3 billion that year, to be exact.

"And most importantly, SIA did not know or have any control over when that situation was going to end," Siow explained.

The minister pointed out that Temasek eventually made a good return from the equity and bonds that it purchased from SIA.

He also corrected any impression that the Government had provided significant support to SIA, highlighting that the support was instead for the whole of aviation sector.

Investment a question for SIA, shareholders to answer

On SIA's investment in Air India, the transport minister said that whether it proves valuable is ultimately a question for SIA and its shareholders to answer.

"The member has insinuated that Singaporeans are somehow paying for the Air India investment. This is not the case. SIA is a listed company that funds its investments from its own earnings," Siow clarified.

In a separate statement from SIA, the group reported that as at June 30 this year, it had $10.48 billion in cash reserves, comprising $9.1 billion in cash and bank balances and $1.38 billion in fixed deposits.

It also has access to $3.24 billion in committed lines of credit, all of which remains undrawn.

"Members may ask difficult questions, but the claims we make must be grounded in facts, not exaggerated speculation that creates needless public alarm.

"Singaporeans deserve public debate that examines risks honestly, explains them responsibly, and remains anchored on truth and logic," the minister added.

交通部长萧敬腾周二（9月8日）在国会表示，新加坡航空公司（新航）对印度航空的投资资金来自其自身的内部收益，而不是像工人党议员张建宗公开暗示的那样由新加坡人出资。

他此番回应既是对阿裕尼第一届国会议员提出的议会质询的回应，也是对他此前发表的公开声明的回应——该声明表达了对新加坡航空公司投资的担忧。

工人党议员曾询问交通部长，新加坡航空公司的亏损以及其海外关联公司的账面价值是否已根据该航空公司提供基本运输服务的能力进行评估。

他还询问，作为指定运营实体，新加坡航空公司根据《新加坡民航局法》所规定的通知义务是否会被此类损失触发。

毫无疑问，新加坡航空有能力提供航空服务

针对 Tiong 的提问，Siow 强调，航空公司作为指定运营实体的地位并非财务报告规则。

相反，这项于去年四月推出的法律旨在让新加坡为极端情况做好准备，并防范恶意行为者控制和对共和国的关键运输实体产生不利影响的风险。

关于该航空公司在新加坡提供航空服务的能力，萧先生表示，相关的问题是，亏损是否已经达到严重限制其资源的程度。

“这是基于事实的判断，而我们距离这种情况还很远，”部长强调说。

他补充道：“目前，我们没有理由怀疑新加坡航空公司在新加坡提供航空服务的能力。”

他指出，新加坡航空的核心业务迎来了最强劲的一年，实现了创纪录的收入、高营业利润率和创纪录的客运量。

除新冠疫情期间外，54年来未提出任何资助申请。

在补充提问中，Tiong表示，虽然他支持公司拥有自主决策的能力，但他不会支持淡马锡进一步注资。

他指出，淡马锡的资本来自新加坡过去的储备金，在2020年新冠疫情期间，淡马锡为该航空公司88亿美元的资本重组提供了担保。

“议会被告知，如有必要，政府将提供更直接的支持。如果印度航空再次出现问题，政府是否会排除再次提供援助的可能性？”这位议员问道。

他以 Indigo 目前在印度航空服务市场的份额以及两家机场运营商可能转型为航空公司为例，说明了其中的风险。

“我们这样问是因为，通过储备金，新加坡人是新航的最终利益相关者，而最终利益相关者需要知道底线在哪里。”

交通部长表示，除新冠疫情期间外，国家航空公司没有向淡马锡寻求任何资金，并补充说，当时的情况“截然不同”。

“航空业陷入停滞。世界各地的航班都停飞了。樟宜机场的客运量下降了90%以上，新加坡航空公司不得不削减96%的定期航班运力——新航的收入几乎为零，每月亏损4亿美元——确切地说，那一年亏损了43亿美元。”

“最重要的是，新加坡航空公司既不知道也无法控制这种情况何时结束，”萧解释说。

部长指出，淡马锡最终从其从新加坡航空公司购买的股票和债券中获得了良好的回报。

他还澄清了政府并未向新加坡航空公司提供大量支持的任何误解，强调政府的支持对象是整个航空业。

投资是新加坡航空公司和股东需要回答的问题

关于新加坡航空对印度航空的投资，交通部长表示，这笔投资是否最终有价值，最终要由新加坡航空及其股东来回答。

“该议员暗示新加坡人以某种方式为印度航空的投资买单。事实并非如此。新航是一家上市公司，其投资资金均来自自身盈利，”萧先生澄清道。

新航集团在另一份声明中报告称，截至今年6月30日，该集团拥有104.8亿美元的现金储备，其中包括91亿美元的现金和银行存款余额以及13.8亿美元的定期存款。

该公司还拥有 32.4 亿美元的已承诺信贷额度，目前尚未动用。

“成员们可能会提出棘手的问题，但我们提出的主张必须基于事实，而不是夸大其词的猜测，以免引起不必要的公众恐慌。

部长补充说：“新加坡人应该享有公开辩论的权利，这种辩论应该诚实地审视风险，负责任地解释风险，并始终以真理和逻辑为基础。”