Air India ground staff pay hike after Vistara merger: CEO Campbell Wilson

Tata Group-owned Air India has decided to put on hold any salary revision for the ground staff until the Competition Commission of India (CCI) approves the merger with Vistara. Air India CEO and managing director Campbell Wilson sent this message out in an internal communication to the staff on Friday. After the CCI approval, compensation revisions will be paid retrospectively back to April 1, 2023, he assured the ground staff.

However, salaries and benefits of the flying staff, including pilots and cabin crew, will be revised in the next few days, Wilson said in the note reviewed by Business Standard. The CEO explained that the flying staff of Air India would not be affected by the merger with Vistara. The development comes in the backdrop of two Air India pilot unions protesting against the “rapid and regressive changes in service conditions” by the management.      

In November 2022, the Tata Group and Singapore Airlines (SIA) announced the merger of Vistara with Air India to drive synergies. While Tatas wholly own Air India, the conglomerate and SIA have a 51:49 stake in Vistara.

After the merger, Singapore Airlines will hold a 25.1 per cent stake in Air India, and Vistara will cease to exist as a brand.

In his communication to the staff, Wilson wrote: “While we await the necessary regulatory approvals to merge the two organizations, we’ve been assessing the merged organisation’s roles and people. This process has proceeded well, but until merger approval is given by the CCI, we’re unable to announce the final, integrated organisation structure.” He added that because Air India cannot announce the integrated structure and some specific roles and job sizes, “we are constrained from doing the same with compensation. As such, we will defer announcing ground staff salary revisions until the CCI approval is granted.” 

While pointing out that backdating will ensure that everyone gets the dues retrospectively, he said: ‘’I am sure that the delay is still a little frustrating….’’  He added that the staff would understand the unique situation of the airline, ‘’the huge opportunities and advantages of the merger with Vistara, and that the delay is temporary." Air India and Vistara currently have approximately 11,000 and 5,100 employees, respectively.

Transition phase

• Flying staff’s salaries and benefits to be revised in a few days
• Model created to allow first officers to quickly become captains
• Second phase of voluntary retirement scheme announced; about 2,000 employees eligible to apply
• Town halls planned for pilots from all four Tata-owned airlines to provide more details

For flying staff, where job roles are not affected by any merger, over the next few days, Air India pilots and cabin crew will receive new contracts aligning compensation and benefits with the industry, Wilson noted.

Air India Express and AirAsia India pilots will also go through salary adjustments as well as alignment of other important benefits such as loss of licence for pilots, according to the internal communication. The loss of licence policy provides insurance coverage against any loss of income experienced by a pilot due to medical reasons or unfitness.

Along with merging Air India and Vistara, the Tata Group initiated the process of merging Air India's two low-cost subsidiaries, AirAsia India and Air India Express, in November.

Since acquiring Air India in January 2022, the Tata Group has been actively engaged in restructuring the airline. Earlier this month, Air India launched the second phase of its voluntary retirement scheme (VRS), which is being offered to permanent general cadre officers aged 40 years or older and who have rendered at least five years of service.

The first phase of VRS saw around 1,500 employees opt for it. The second phase is open until April 30, and approximately 2,000 employees are eligible to apply.

In December, two major pilot unions of Air India opposed the airline's plan to hire new captains, saying it would impact the career progression of existing first officers who are waiting to become captains. Wilson stated on Friday that the merger of Air India and Vistara will affect the flying staff in only one way: how various seniority lists are integrated.

"Since last month's town halls, we have been working with (consultancy firm) BCG and all four group airlines to refine the principles and methodology for integrating seniority, in order to achieve the best overall outcome. I am pleased that a model has been agreed upon with all COO/HFOs (pilots) that provides faster opportunities for command (to become captains), faster opportunities to fly widebody, and faster opportunities to become trainers, while also accommodating the diverse perspectives of our staff," he explained.

In the next few weeks, Air India plans to conduct a series of town halls with pilots from all four airlines to explain the details further. According to Wilson, the process of integrating the cabin crew across the four airlines has already begun.