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Details of the schemes reviewed by ET showed permanent employees who have completed at least five years of service are eligible for the retirement package. While those who have not completed five years can opt for the voluntary separation scheme.
People familiar with the matter said the company expects nearly 700 employees to avail the schemes.
Air India has about 18,000 employees, while sister airline Vistara has about 6,000 employees.
Employees opting for the schemes will be compensated under the Gujarat model or the Department of Heavy Industries model, whichever is higher.
A spokesperson for Air India confirmed roll out of the schemes.
The merger of erstwhile state-run Air India and Vistara underscores moves by the salt-to steel conglomerate to revamp its airline business which posted a loss of Rs 15,532 crore in FY23. This includes leveraging synergies, maximising efficiencies and reducing duplication. Under this, budget carriers Air India Express and AirAsia India have been merged to form a single airline. The combined entity of Air India and Vistara will compete in the full-service segment.
Officials said because of the imminent merger, many roles and positions have become redundant or there is a duplication, leading Air India to launch the scheme.
“Employees of both companies have been evaluated for their roles and some employees will be impacted by the merger. Besides the compensation, the Tata group is trying to relocate some of the affected employees into group companies as much as possible,” said a person aware of the developments.
A team of senior executives from Air India and Vistara, along with consultancy firm BCG is working on the integration of human resources, while law firm AZB Partners is handling legal and regulatory compliance.
As part of the human integration process, the non-flying staff of Vistara has been appraised through a process called Hogan Test, designed by US-based firm Hogan. The test measures normal personality characteristics necessary for job fit, especially leadership roles.
The Tata group is in favour of continuing with the top management at Air India post the merger.
All C-level executives at Air India are likely to keep their positions after the merger, according to a separate internal communication reviewed by ET.
While Campbell Wilson will remain the chief executive officer (CEO), Nipun Aggarwal will remain as the chief commercial and transformation officer and Sanjay Sharma will be the chief financial officer.
Vistara CEO Vinod Kannan is likely to return to his parent company Singapore Airlines (SIA). Kannan was on secondment to Vistara since 2019 when he joined as the chief strategy officer. SIA had the right to appoint the CEO in Vistara while the Tata group appointed the CFO.
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