There seems to be an awful lot of noise about Air India's financial troubles, that put Singapore Airlines – which has a stake of 25% in the carrier – on notice, as it might be forced to cough up S$500 million to cover the recent losses.

Workers' Party didn't want to waste the opportunity and sent Kenneth Tiong to attack the government by proxy, by demanding that Temasek's funds are not used to "prop up" the Indian company (as if that was ever a possibility).

That, of course, was a calculated assault, dragging Temasek into the spotlight, as its name is more likely to trigger a visceral response among Singaporeans, as it is one of the guardians of Singapore's reserves.

Without understanding the context, many people may now think that India is leeching on the hard earned dollars from the national nest egg – which WP has surely calculated to be a good tactic in a society where anti-Indian sentiments are quite strong.

That appalling cynicism is, of course, a regular modus operandi of the opposition party. A much bigger problem is the fact that the media are not doing the job educating people as to what the facts mean.

Starting with the most important one:

Singapore Airlines has never invested in Air India.

There are viral social media posts – quoting LKY from a quarter of a century ago, citing his opposition to investing in Air India – which play on the gullibility and ignorance of the masses.

But SIA never wanted Air India.

Instead, back in 2013 it did exactly what LKY advised instead: set up a completely new airline – Vistara – in cooperation with Tata, right after India opened up the market to foreign investment, permitting outside companies to acquire a stake of up to 49%.

The idea was simple: start with a clean slate and build a modern, reputable full-service airline based in one of the largest, rapidly growing markets in the world, which would provide a stream of passengers that SIA itself could benefit from.

It started flying in 2015 and received positive reviews over the years, capturing 10% of the local market before the merger. It has never turned a profit (something that today's critics of Air India are mum about), although it seemed to have been approaching a break-even point.

How did SIA get into Air India?

By 2017 the Indian government tried to privatise the national airline again, unable to stem the losses and make it competitive. In 2022 it intervened to cut its debt load and eventually attracted a succesful bid from Tata – the company that SIA co-owned Vistara with.

This presented a problem, however, because Tata now owned two, competing airlines. Vistara had no future.

Reasonably, then, Tata initiated a merger proposal, which would fold Vistara into Air India Group, creating one, large company, which at the time had almost 30% of the market by volume (so, three times what Vistara did).

Singapore Airlines had a choice to make – either trade its stake in Vistara for a stake in Air India, or sell it and exit India completely, abandoning the original, long-term strategy.

Unsurprisingly, it chose to stay.

It did so for two reasons.

Firstly, India remains a highly prospective aviation market. Why abandon it entirely? Secondly, Air India was now owned by the same partners it built Vistara with. They had a 10-year relationship and believed their objectives and methods were aligned.

So, it traded the 49% of the smaller company for 25.1% in a much larger one, earning a small size and passenger premium (since the combined group was considerably larger), albeit in a business that was bleeding money and still needs to be turned around.

The merger had obvious upsides and downsides.

Air India had been posting losses for years and needed painful restructuring.

On the other hand, it had a much larger network and share in the market. And SIA would be working with the same people it had worked with before.

In fact, the new company's CEO and Managing Director (until this year) was Campbell Wilson, who had spent 25 years at Singapore Airlines, including two stints as CEO of Scoot. So, the relationship with Tata was good enough that it was happy to appoint a SIA-linked executive to lead the airline (immediately in 2022, even before the merger was finalised).

Nevertheless, the financial hemorrhaging is yet to stop. Last year's Ahmedabad crash didn't help the situation either.

But it would be silly to judge SIA's stake in Air India to be a costly failure, since the merger with Vistara was only completed in 2024.

How exactly does anybody expect that a fundamentally troubled company, which has only just started operating under new ownership, following a pandemic that strangled air traffic for a few years, is going to turn a profit within two years?

For Singapore Airlines the horizon is 20, 30, 50 years, not 2. And yes, it means that it may be forced to regularly cover the losses before the Indian flagship stabilises down the road.

It's worth remembering that, outside of India itself, Singapore is the only country in the world that has a stake in Indian aviation.

Which is why it is crucial to understand that SIA didn't bet on Air India – it bet on India as a future market. That future is only yet to come.