Vistara Offers Voluntary Retirement Ahead of Air India Merger

In preparation for its upcoming merger with Air India, Vistara has announced a voluntary retirement scheme (VRS) and voluntary separation scheme (VSS) for its permanent ground staff. According to an email circulated to employees on July 29, 2024, staff members with over five years of service are eligible for these schemes.

This move comes shortly after Air India implemented a similar VRS and VSS for its non-flying permanent staff earlier in July. A senior executive at Vistara indicated that approximately 1,200 employees are eligible, though only about 200 are expected to opt in. The executive emphasized that the scheme is not an ultimatum but part of the merger process to ensure a smooth transition.

Approximately 90% of Vistara employees have been reassigned roles within Air India, surpassing industry averages for airline mergers. This merger, part of Tata Group’s consolidation efforts, includes integrating Air India Express and AIX Connect. Once finalized, Singapore Airlines will hold a 25.1% stake in the merged entity.

The VRS and VSS schemes introduced by Vistara are designed to provide a smooth transition for ground staff as the airline integrates with Air India. The schemes are part of a broader effort to streamline operations and align the workforce with the new organizational structure. Employees with over five years of service are eligible, offering them a voluntary exit route with benefits. This initiative aims to minimize disruption and ensure that the merger process respects the contributions of long-serving staff.

A key aspect of the merger process has been the reassignment of Vistara employees within the Air India framework. According to Vistara’s senior executive, approximately 90% of the airline’s employees have been reassigned to new roles. This high reassignment rate is notable compared to industry standards, where such mergers often result in significant job losses. The reassignment process takes into account individual experience, performance, and other relevant factors to place employees in suitable positions within the merged entity.