As the merger between Air India and Vistara edges closer to completion, the reality of job losses is becoming increasingly apparent. About 300 non-flying employees at Air India, who are on fixed-term contracts, are facing the threat of unemployment due to this consolidation. Many of these employees have dedicated between 10 to 15 years of service to the airline, and now find themselves in limbo as their roles are phased out.
The Fitment Process
In preparation for the merger, a thorough fitment process has been in progress for several months. This exercise involves assessing the roles and capabilities of staff from both airlines, considering their experience and performance. Despite their long service and consistent contract renewals in the past, these 300 employees have not been allocated new positions within the merged entity.
Uncertain Futures
With the Tata Group owning Air India, it appears that the contracts for these non-flying employees will not be renewed. Historically, their contracts were renewed regularly, but the current merger process has left them without positions. Sources indicate that their contracts are at risk because they were not reassigned roles during the fitment process.
Retirement Schemes Exclusion
On July 17, Air India introduced a voluntary retirement scheme (VRS) for its permanent ground staff, applicable to those with at least five years of service. For those with less than five years, a voluntary separation scheme (VSS) was also announced. However, fixed-term contract employees are not eligible for these schemes, which means they face job insecurity without the same options available to permanent employees.
Strategic Consolidation
The merger of Air India and Vistara is part of the Tata Group’s broader strategy to streamline its airline operations. Vistara, a joint venture between Tata Group and Singapore Airlines, is set to merge with Air India by the end of this year. The merged entity will need fewer ground staff, leading to the current optimization process that has impacted the 300 employees.
Workforce Impact
The merger will significantly alter the workforce structure of both airlines, which together employ over 23,000 people. The optimization effort aims to cut down on the number of ground staff required for the new combined entity. This move is intended to enhance operational efficiency and reduce costs, but it comes at the expense of job security for many.
Broader Consolidation Efforts
Beyond merging Air India with Vistara, the Tata Group is also consolidating its low-cost airline operations. Air India Express will merge with AIX Connect, formerly AirAsia India. This consolidation, announced in November 2022, is part of Tata Group’s plan to create a streamlined structure featuring a full-service carrier and a low-cost airline.
Employee Challenges
The ongoing fitment process has left many employees, especially those on fixed-term contracts, uncertain about their future. The prospect of job losses is a significant concern for the 300 employees affected, as they lack the exit options available to permanent staff. Their inability to access retirement schemes or separation packages exacerbates their precarious situation.
Moving Forward
As the merger nears its final stages, efforts will focus on finalizing the new organizational structure and facilitating a smooth transition for remaining employees. While the Tata Group’s consolidation strategy aims to strengthen the airline’s market position, it highlights the challenges faced by employees during such transitions.
