Singapore Airlines defended its investment in loss-making Air India after reporting a significant drop in net income for the 2025 fiscal year.
The decision highlights the risk associated with expanding into the Indian aviation market, where high operational costs and competition often lead to heavy losses. The financial impact of this strategic move is now visible in the company's latest earnings report.
Singapore Airlines reported that its net income for fiscal year 2025 fell by 57.4% [1]. The company's net income for the period totaled $927 million [1]. This decline is attributed in part to the financial performance of Air India, which has struggled to maintain profitability.
Air India reported an annual loss of INR 220 billion, which is approximately $2.4 billion [3]. Despite these figures, the leadership at Singapore Airlines remains committed to the partnership, viewing the Indian market as a long-term growth opportunity.
CEO Goh Choon Phong said, "We know the market and how difficult it feels" [2].
The company maintains that its understanding of the regional challenges justifies the current losses. The investment is intended to secure a strategic foothold in one of the fastest-growing aviation markets in the world, a move that may take years to yield a positive return.
Air India continues to face operational hurdles that contributed to the $2.4 billion loss [3]. However, Singapore Airlines has indicated that it understands the difficulties involved in scaling operations within India and is prepared to manage the volatility associated with the venture.
“"We know the market and how difficult it feels."”
This financial result demonstrates the tension between short-term profitability and long-term strategic expansion. By absorbing significant losses from Air India, Singapore Airlines is betting that the future growth of the Indian middle class and aviation infrastructure will eventually outweigh the current capital drain, effectively treating the loss as a cost of market entry.
