Vistara that is scheduled to merge into Air India – both run by the Tatas – by the end of this year has reportedly rolled out a voluntary retirement scheme (VRS) for its ground staff. These employees would be eligible for statutory benefits like gratuity and PF, as well as non-statutory benefits like medical insurance and staff travel.
According to a report in The Economic Times, the airline said that the maximum compensation to its workers will be offered as per the ‘Gujarat Pattern’ or ‘Department of Heavy Industries Pattern’, whichever is higher.
Vistara’s VRS would be open to permanent ground or non-flying staff with more than five years of continuous service. The scheme, the report added, would run till August 23.
This voluntary retirement scheme comes as both Vistara and Air India are looking to rationalise their workforce in view of the planned merger. Vistara’s VRS comes two weeks after Air India announced its voluntary retirement scheme as well as a voluntary separation scheme for all its eligible staff. This will run till August 16.
Air India has 18,000 employees and Vistara has 6,500 employees.
According to the report, while eligible employees will get the statutory benefits, Vistara will ensure continuity of its medical insurance and staff travel benefits till March 31, 2025 for these employees. After this, staff travel benefits would be subject to the airline’s retired employee policy.
The Tata Group is consolidating its airline business to improve efficiency and reduce redundancy. Air India Express and AirAsia India will merge to form a no-frills airline, while Air India and Vistara will merge to create a full-service airline. Vistara is a 51:49 joint venture between the Tatas and Singapore Airlines.