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How much compensation airlines are liable to pay in case of an accident


The incident at the Kozhikode airport, where an Air India Express plane crashed due to runway excursion, on 4 August claimed at least 19 lives and left more than 130 people injured.

For passengers and their financial dependants, such injuries could result into a long period of income loss or income stoppage in case of death.

If you’re someone who travels by air, it would be useful to know the kind of compensation the airlines are liable to offer you in case of an accident.

An airline is liable to pay compensation to passengers if it is found to be at fault for flight cancellation or delay, denial of boarding and baggage loss. “Apart from this, airlines are also liable to pay compensation if a passenger dies or undergoes bodily injuries onboard an aircraft. This claim is as per the Montreal convention protocol as accepted by India in 2009,” said Akanksha Anshu, co-founder and managing director, Refundme.in, a company that provides services for air passengers to claim compensation.

The liability limit in case of death or injury is up to 1,13,100 SDR (special drawing rights). As on 21 August, 1 SDR is equal to $1.422. However, the actual amount the passenger receives will depend on a number of factors.

Typically, the claimant (family of the deceased passenger or the injured) has to prove the extent of the actual damage suffered. Factors such as age of the deceased passenger, educational status, employment, last salary drawn, marital status, general economic status, the number of dependants the extent of dependency are, typically, considered to assess the damage. “The Montreal Convention 1999 (MC 99) does not allow claims for damages for mental anguish and inconvenience caused or suffered by the claimant,” added Anshu.

Mark Martin, founder and CEO, Martin consultancy, an aviation safety firm, said although the maximum limit of the compensation is guided by the Montreal Convention, the amount of compensation will depend on the hull insurance taken by the airline company and varies from country to country. “Hull insurance is basically the insurance of the whole asset which includes the plane and third-party liabilities and all those who are travelling on board. Therefore, the insurance company will pay compensation depending on the insurance cover it has taken for the passengers, divided by the number of passengers,” added Martin.

According to Section 28 of Schedule III of MC99, an interim compensation of 10 lakh per passenger should be offered by the airline. “The compensation is generally paid within 90 days. The details of the nominee are noted when next of the kin approaches to collect the mortal remains of the passenger,” said Martin.

This interim compensation amount can be deducted from the final compensation paid after the final report by the Aircraft Accident Investigation Bureau (AAIB) is out.

“In the recent Kozhikode plane crash, Air India Express announced interim compensation of 10 lakh to the next kin of the deceased passenger of 12 years and above; 5 lakh for passengers below 12 years of age, and 2 lakh for passengers injured in the incident,” said Anshu.

The process to claim the compensation may vary from airline to airline. Airlines can choose to settle through direct communication with the passenger or the family or to release a form which needs to be filled for the claim.

After the Kozhikode air crash, Air India Express said on its website on 15 August, “Air India Express shall directly contact the injured passengers/next of kin of the deceased passengers whose contact details are available with the airline to ensure the disbursement at the earliest. The disbursement to the injured passengers shall be made first. In case they do not hear from the airline by 20 August 2020, they may please contact the Airline on 8590975761 or 8590983213.”

Further, Anshu said the passenger or her family can also take the matter to court if she is not satisfied with the compensation offered by the airline. In the case of court settlement, MC99 provides various jurisdiction options such as the domicile of origin of the carrier, the carrier’s headquarters, place of final destination, the passenger’s permanent place of residence at the time of the accident and so on.

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