Air India introduces Voluntary Separation Scheme for 600 employees ahead of Vistara merger

Air India is set to introduce a Voluntary Separation Scheme (VSS) for approximately 600 employees whose roles may become redundant following the merger with Vistara. Despite the reorganization, all flying crew will retain their positions as the airline anticipates substantial operational growth post-merger. Recently, Air India’s management informed employees about potential redundancies post-merger. To mitigate job losses, the Tata Group plans to reassign some employees to new roles through upskilling and relocate others within the group’s various companies.

“The scheme might get implemented by the middle of this month. The board will deliberate on it,” a source said.

Air India currently employs around 19,000 people, including both contractual and permanent staff, while Vistara has a workforce of about 6,500. Alongside the voluntary separation scheme, the airline will offer health and other benefits to affected employees. This development follows a comprehensive fitment exercise across both airlines, assisted by global firms such as the Boston Consulting Group (BCG) and Deloitte. The airline group is also expediting the legal merger process, though operational integration may take longer.

Furthermore, Air India has streamlined and aligned operational processes, pay scales, employee grades, and roles with those of Vistara. On Monday, Air India announced the completion of harmonizing operating procedures and aligning supporting manuals across key functions for the four Tata Group airlines.

Vistara, a joint venture with Tata Group (51 percent) and Singapore Airlines (49 percent), is merging with Air India to create a unified full-service carrier. Simultaneously, Air India’s subsidiaries, AIX Connect and Air India Express, are being merged to form a unified low-cost airline.

In an official statement, Air India said, “Over the last 18 months, a team of more than 100 members have worked to align on the best practices and adopt common operating procedures. The result of this will be two separate manuals for the full-service carrier and the low-cost carrier.”