Tata Group-controlled Air India will be cutting down more staff ahead of its merger with Vistara. On Wednesday, the carrier announced a voluntary retirement scheme (VRS) for its permanent ground staff.
In a message to the ground staff, Air India said: "We are announcing a Voluntary Retirement Scheme (VRS) for employees with a minimum of five years of continuous service at Air India and a Voluntary Separation Scheme (VSS) for employees with less than five years of continuous service."
Vistara, a 51:49 joint venture between the Tata Group and Singapore Airlines, is in the process of merging with Air India by the end of this year. According to an Air India executive, the merged entity will require a reduced number of ground staff, leading to the commencement of an "optimisation" process.
The carrier further said that all permanent ground staff -- excluding pilots, cabin crew, and any licensed role holder -- would be eligible for two schemes -- VSS and VRS, Business Standard reported on Wednesday.
Air India said the window to participate in the two schemes would remain open till August 16. The airline stated that the "acceptance" of applications and the "release date" would be decided by the management.
As per the report, about 500-600 Air India employees, of the total of 18,000 from the two carriers, are expected to be retired or separated after the schemes will be implemented. The airline is making efforts to retain as many employees as possible, with some being absorbed into other Tata Group companies. However, certain positions have become redundant due to the merger, the airline said.
Vistara and Air India are set to merge in order to establish a single full-service carrier. Besides this merger, the subsidiaries of Air India, AIX Connect and Air India Express, are also combining forces to create a unified low-cost airline.
In March 2024, Air India laid off around 180 employees across different departments. Air India said these employees in the non-flying functions didn't have a suitable role in the organisation and they were given options to take voluntary retirement but they chose to not utilise the offer.
Earlier this week, it was reported that top executives of Air India are likely to retain their positions following the airline’s merger with Vistara. Air India executives, such as Campbell Wilson, Nipun Aggarwal, and Sanjay Sharma, are anticipated to maintain their positions post the merger with Vistara.
Vistara's CEO Vinod Kannan is likely to return to Singapore Airlines from his secondment to Vistara, a joint endeavor between Tata Sons and Singapore Airlines, where he was serving as the chief strategy officer since 2019. Notably, at the time of the merger, Singapore Airlines retained the authority to appoint the Vistara CEO, while Tata had the privilege to nominate the CFO.
Vistara chief commercial officer Deepak Rajawat is expected to be part of the merged entity. It is planned that the majority of Vistara employees will transition to the merged company; however, certain positions may become obsolete as Air India currently has them staffed.