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The Hindu
14 hours ago
- Business
- The Hindu
Two parallel compensations at work for domestic, international services in case of airline accidents in the country
Although many airlines have been using the same aircraft for the operations of domestic and international services, two 'parallel systems of compensation' — one for the domestic and the other for the international — are at work in the country. For instance, in the event of an accident, compensation to the victims varies depending on whether the flight was international or domestic. For death or serious injury, international passengers may receive up to 1,13,100 Special Drawing Rights (SDR) (around ₹1.25 crore), while the compensation for the same in the domestic sector is limited to just ₹20 lakh. The SDR is the global currency for airline compensation under the Montreal Convention, valued daily by the IMF based on five major currencies and published as the official exchange rate. Similarly, baggage claims are capped at 1,131 SDR in international flights, but only ₹20,000 in domestic. For cargo loss or damage, the limit is 19 SDR per kg internationally, compared to just ₹350 per kg on domestic flights. Equal compensation Speaking to The Hindu, Biji Eapen, president, Airline Users Rights and Grievances Redressal Forum (AURGRF) which submitted a representation to the Union Minister of Civil Aviation seeking to fix the anomalies in the compensation rules, said equal compensation is the right of all passengers, regardless of route or carrier type. Further, the adoption of the International Civil Aviation Organisation's (ICAO) revised compensation limits under the Montreal Convention 1999 (MC99), effective 28 December 2024, will address some of the major gaps in the area, he said. Though the Air Passengers Rights Charter, 2019, was a positive move, the revised Montreal Convention Compensation Limits were not adopted by the country. The 1999 Montreal Convention (MC99), framed by the ICAO and International Air Transport Association (IATA), establishes a uniform global liability standard that applies equally to domestic and international airline operations worldwide. Under MC99 As per the ICAO's revised compensation limits under the MC99, death or serious injury will attract a compensation of 151,880 SDR ($2,02,500) followed by 6,303 SDR ($8,400) for passenger delay, 1,519 SDR ($2,000) for baggage loss/damage/delay, and 26 SDR/kg ($35/kg) for cargo loss/damage. In the aftermath of the Ahmedabad plane crash, the Air India and the Tata Group announced ₹1 crore in compensation per victim, along with an interim ₹25 lakh payment. If the revised compensation limit is adopted, the compensation would be around ₹1.72 crore, said Mr. Eapen. Considering that Indian carriers frequently operate the same aircraft across both the domestic and the international routes and participate in code-sharing with foreign airlines, a unified regulatory framework is essential. Hence, the Union government should be ready to ratify the ICAO's updated MC99 limits without delay, along with amending the 2019 Air Passengers Rights Rules to reflect international standards, said the representation submitted to the Centre.
The Print
13-06-2025
- Business
- The Print
Montreal Convention to decide final compensation for Air India crash victims' kin. What it says
The Tata Group, the owner of Air India, has announced a Rs 1 crore compensation for the family of every person who died in the crash, along with the coverage of medical expenses for the injured while ensuring they receive the necessary care and support. The flight, a Boeing 787-8 Dreamliner, crashed shortly after taking off from Sardar Vallabhbhai Patel International Airport in Ahmedabad's Meghaninagar. A total of 242 people, including two pilots and 10 crew members, were on the flight bound for Gatwick Airport, London. New Delhi: Soon after the crash of Air India Flight 171 flying from Ahmedabad to London Thursday, the Tata Group announced compensation for the families of victims, but the Montreal Convention 1999 may likely decide the final compensatory relief for them. However, experts point out that the final compensation is subject to the framework of the Montreal Convention. The Convention for Unification of Certain Rules for International Carriage by Air—commonly known as the Montreal Convention—was adopted at a diplomatic meeting in Montreal, Canada, on 28 May 1999. 'In light of the recent Air India crash, the airline has announced an interim ex gratia compensation of Rs one crore to the families of the deceased. However, final compensation is subject to the convention's framework. This announcement seems to be in line with the right of the passengers/injured to interim compensation under Article 28 of the convention,' Ishwar Ahuja, a partner at law firm Saga Legal, told ThePrint. What does this convention say about compensation, and how does it apply to the Ahmedabad Air India crash? ThePrint explains. Convention: Who does it apply to The Montreal Convention applies to all international carriage of people, baggage, or cargo in an aircraft. In 2009, India became the 91st country to ratify the convention. A PIB release, at the time, said the Director General of Civil Aviation (India) deposited the 'Instrument of Accession' to the International Civil Aviation Organisation. The convention has been incorporated into the Carriage by Air (Amendment) Act 2009 in India. Post-ratification of the Montreal Convention in 2009, Ahuja explained, the Carriage by Air Act 1972 was amended in 2009, incorporating Section 4A and Schedule III, bringing the liability regime of the convention into the domestic law in India. London-based international law and governance expert Dharminder Singh Kaleka, talking about who the convention applied to, said, 'What matters is whether the flight was international and whether the countries involved, departure, destination, or residence, are parties to the convention. Once they meet those criteria, all passengers are entitled to the same protections and compensation limits, regardless of their citizenship.' The AI aircraft had 169 Indian nationals, 53 British nationals, seven Portuguese nationals, and one Canadian national on board. 'Uniformity is a core principle of the convention, ensuring equal treatment and legal recourse for all affected individuals,' Kaleka, who serves as Advisor for Strategy and External Relations to boutique advisory firm, Closed Door India, asserted. Also Read: Confusion, debris & bodies at Air India crash site. Rescue worker first thought it was cylinder blast Damages: What the convention says Chapter III of the convention talks about the 'liability of the carrier and extent of compensation for damage'. Kaleka explained that under the convention, airlines are strictly liable for up to 1,51,880 'Special Drawing Rights (SDR)', amounting to over $2,07,000 per passenger in the event of death or bodily injury, without the need to prove fault. SDR is not a currency but rather an international reserve asset created by the International Monetary Fund in 1969. Its value depends on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. This asset is exchangeable for currency by holders. The value of SDR in terms of US Dollars (USD) is determined daily based on the spot exchange rates observed close to noon, London time. As of 13 June 2025, the value of one SDR is 1.368 USD. 'For baggage, cargo and passenger delay claims, separate SDR limits apply. These thresholds get reviewed every five years to account for inflation. The most recent adjustment, effective from December 2024, increased the limits by 17.9 percent. The convention thus ensures a guaranteed base level of compensation,' he explained. Beyond this amount, Kaleka said, the compensation is 'unlimited', but the airline must show it was not negligent to avoid further liability. Ahuja also pointed out that Article 23 of the convention provides that the conversion of SDRs into national currency must be made according to the IMF method of valuation in effect on the date of judgment. As of Friday, one SDR equals Rs 121.98. 'Accordingly, any judicial or arbitral determination of compensation must consider both the applicable SDR valuation and the specific evidentiary findings, including the existence of wilful misconduct or gross negligence by the carrier,' he added. Who will pay the compensation Kaleka explained that the compensation is typically paid by the liability insurance provider of the airline. Article 50 of the Convention makes it mandatory for airlines to maintain adequate liability insurance. Article 50 of the convention says, 'States Parties shall require their carriers to maintain adequate insurance covering their liability under this convention.' Kaleka asserted that in cases of catastrophic accidents, such as the AI 171 crash, the airline initiates interim payments directly to the victims' families, after which insurance settlements complete the full compensation payment. 'If negligence or systemic failure gets established, the airline and potentially other liable parties such as aircraft manufacturers may face additional financial exposure,' he said. 'The cost to the airline is in terms of the exuberant insurance premium, which it will have to pay going forward now.' (Edited by Madhurita Goswami) Also Read: Air India crash: Family supplying tiffin to medical college awaits news on missing kin, including 2-yr-old
