Singapore Airlines (SIA) is making an additional investment of ₹3,194.5 crore in Air India after the merger of Vistara in November.

It is open to more capital injection based on Air India’s requirements, the international carrier said last Friday, while releasing its financial results.

The international carrier initially agreed to invest ₹2,058.5 crore (Singapore$ 360 million, US $ 250 million$250 million) when it agreed to merge Vistara with Tata-owned Air India in 2022, giving it a 25.1 stake in the enlarged Air India group.

SIA and Tata held a 49 per cent and 51 per cent stake in Vistara, respectively, while Air India was wholly owned by the Tatas, including low-cost carriers Air India Express and AirAsia India. The merger was expected to be completed by March 2024.

The airline said the merger deal in 2022 also included an agreement to contribute its share to any funding provided by the Tatas before the completion of the merger that would allow it to maintain a 25.1 per cent stake in Air India — which will be up to ₹5,020 crore (Singapore $880 million, based on the prevailing exchange rates at that time).

As part of this agreement, SIA’s ``additional capital injection’’ is expected to be ₹3,194.5 crore (Singapore $498 million), based on Tata’s funding to Air India.

According to the SIA group, this will occur after the completion of the merger and within November 2024, through subscription to new Air India shares.

SIA said the merged entity will have a significant presence across all key Indian air travel segments including domestic, international, full-service and low-cost operations.

The amalgamation will strengthen its multi-hub strategy, allowing it to continue participating directly in India’s large and fast-growing aviation market.

iAir India and SIA recently

agreed to significantly expand their codeshare agreement, adding 11 Indiancities and another 40 international destinations totheir network.

It marked the first extensive expansion of codeshare arrangements between the airlines since 2010, offering customers enhanced travel options between Singapore and India, as well as beyond.

SIA disclosed both the carriers will continue to explore ways to deepen their commercial partnership.

On the outlook for the aviation sector, SIA said while the demand for air travel is expected to be robust in the second half of the financial year, the operating landscape will continue to be competitive.

“The Group will remain nimble and agile, adjusting its passenger network and capacity to match evolving demand patterns. Heading into the year-end peak, air freight demand is expected to stay healthy. The Group will monitor key trade lanes and adapt its capacity accordingly,” the carrier added.

“As the aviation industry grapples with geo-political tensions, macroeconomic uncertainty, increasedcompetition, and inflationary cost pressures, the groupremains well-positionedto navigate these from aposition of strength.’’

During the second quarter of 2024-25, the SIA Group posted revenues of S$4,779 million against S$4,683 million in the same period of the previous year, while net profits during the same period stood at S$290 million and S$707 million respectively.

Pilot gripe

A section of Air India pilots is unhappy in the run-up to the Vistara merger over different retirement age limits for pilots of the two Tata Group-owned airlines as the management is yet to address the issue, according to sources, PTI reports. The retirement age of pilots in AI is 58, whereas at Vistara it is 60 years.