2 days ago
SIA shares fall 1.9% in wake of Air India crash
Singapore Airlines holds a 25.1 per cent stake in Air India following the Indian carrier's merger with SIA-backed Vistara in November 2024. PHOTO: EPA-EFE
SINGAPORE - Singapore Airlines (SIA) shares dropped on June 13, the day after an Air India plane crash that resulted in at least 265 casualties.
Shares of SIA, which holds a 25.1 per cent stake in Air India, were down 13 cents to $6.90 as at 9.30am.
The Straits Times Index meanwhile was down 0.5 per cent as Asian markets fell after Israel carried out airstrikes against targets in Iran, raising fears of fresh conflict in the Middle East.
A day earlier, Air India Flight AI171 bound for London from Ahmedabad Airport crashed outside the airport perimeter minutes after taking off, killing 241 people on board. It also killed some people on the ground when it crashed into a medical college hostel.
SIA's stake in Air India came about after the Indian flagship carrier merged with Vistara in November 2024. Before the merger, Vistara was jointly owned by Tata Sons and SIA.
SIA's stake in the enlarged Air India allows it to participate directly in the fast-expanding Indian aviation market.
SIA and Air India also have a codesharing partnership.
In 2024, this partnership was expanded when the airlines announced the addition of 11 Indian cities and 40 international destinations to their codeshare network.
The two carriers also said they will increase their weekly scheduled codeshare services to 56, up from 14, and will codeshare on each others' flights between Singapore and the Indian cities of Bengaluru and Chennai.
SIA told The Straits Times on June 12 that it is 'offering full support and all necessary assistance to Air India during this time'.
It adds: 'Singapore Airlines extends our deepest condolences to all passengers, crew members and their families affected by Air India Flight AI171. Our thoughts and prayers are with everyone impacted during this difficult time.'
SIA in May posted a record $2.8 billion net profit for the year ended March 31, boosted by a one-off non-cash accounting gain of $1.1 billion from the Air India-Vistara merger.
The Air India crash marks the first-ever complete loss of a 787 Dreamliner, which has had an exemplary safety record. The aircraft Boeing introduced more than a decade ago has become a vital source of revenue for the US planemaker, with 1,148 of the jets in service globally.
'It is still too early to tell what happened, though it seems this was not likely a manufacturing or design issue given the age and usage history of the aircraft,' Citi analyst Jason Gursky wrote in a client note on June 12. 'The stock will likely trade down until we learn more.'
Boeing shares fell 4.8 per cent in New York on June 12, the biggest decline of any stock in the S&P 500 index.
Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance.
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