As Air India and Vistara prepare for their merger, approximately 300 non-flying employees on fixed-term contracts with Air India are unlikely to have their contracts renewed. These employees, who have been with Air India for 10-15 years, have not been assigned roles in the fitment exercise, which has almost concluded.
Non-Renewal of Contracts: Details and Reasons
Sources indicate that the number of fixed-term contract (FTC) employees affected stands around 300. These employees have previously had their employment contracts renewed regularly, but the current merger process has left them without assigned roles. The fitment exercise, evaluating roles and responsibilities of staff from both airlines, considers factors such as prior experience and performance.
Voluntary Retirement and Separation Schemes: Limited Eligibility
On July 17, Air India announced a voluntary retirement scheme (VRS) for permanent ground staff with at least five years of continuous service and a voluntary separation scheme (VSS) for those with less than five years of continuous service. However, FTC employees are not entitled to these schemes, unlike permanent staff who also did not find a position after the fitment exercise.
Merger Context: Consolidation of Airline Businesses
The Air India-Vistara merger is part of Tata Group’s broader strategy to consolidate its airline business. The merged entity will reportedly require fewer ground staff, prompting an “optimisation” process. Vistara, a 51:49 joint venture between Tata Group and Singapore Airlines, is set to merge with Air India by the end of the year. The combined workforce of the two airlines exceeds 23,000 employees.
Broader Mergers: Air India Express and AIX Connect
In addition to merging Air India with Vistara, Tata Group is also consolidating its low-cost airline operations by merging Air India Express with AIX Connect (formerly AirAsia India). Tata Group took control of Air India in January 2022 and announced the consolidation plan in November, aiming to streamline its airline operations into a full-service carrier and a low-cost airline.
Conclusion: Uncertain Future for Non-Flying Employees
As the Air India-Vistara merger progresses, the future remains uncertain for around 300 non-flying employees on fixed-term contracts. With no assigned roles in the fitment exercise and ineligibility for voluntary retirement schemes, these employees face the prospect of their contracts not being renewed. The merger marks a significant restructuring within Tata Group’s airline business, impacting thousands of employees.
