Below is a letter from Ms Dipa Swaminathan to ST Forum on SIA’s investment in Air India.
I have been struck by the almost gleeful tone of comments about Singapore Airlines’ (SIA) losses arising from its investment in Air India. There is legitimate room to question any investment, and its valuation, execution and eventual return. But some of the comments seem to have acquired a distinctly different flavour, as though the difficulties are somehow evidence of the folly of investing in an Indian company.
A little perspective may be useful.
In 2000, Singtel invested US$400 million in India’s Bharti Group. Bharti Airtel has since become one of Singtel’s most valuable overseas investments.
Not every overseas investment has followed that trajectory. Singtel’s acquisition of Optus in 2001 valued the Australian company at roughly A$15 billion. Optus has subsequently experienced both successful and extremely difficult periods.
Singapore’s experience with China offers another lesson. The much-heralded Suzhou Industrial Park accumulated substantial losses in its early years, prompting Singapore to reduce its stake and relinquish management control. Yet the park subsequently prospered and became an important platform for Singapore businesses in China.
Temasek, too, has had investments that failed, including its US$275 million (S$350 million) investment in cryptocurrency exchange FTX, alongside many enormously successful investments.
That is investing. Some investments succeed spectacularly. Some disappoint. Some require restructuring. Some take decades for their original thesis to be vindicated; others never are.
SIA’s investment in Air India should rightly be scrutinised. But it should be scrutinised as an investment, using the same standards and time horizons applied to investments in Australia, China, America or anywhere else.
What is troubling is when criticism slips from examining commercial performance into sweeping assumptions about India, Indian companies or their ability to be professionally managed.
Air India is undertaking an ambitious turnaround. It is too early to know if it will succeed.
But its nationality should be neither a defence nor an indictment. Singapore’s investment history should have taught us that.
