SUMMARY

The Business Standard article outlines the compensation framework for families of victims of the Air India flight AI171 crash in Ahmedabad on June 12, 2025, governed primarily by the Montreal Convention of 1999, to which India is a signatory.

Key details

1. Minimum Compensation: Under the Montreal Convention, families of deceased passengers are entitled to a minimum of 128,821 Special Drawing Rights (SDRs) per passenger, approximately ₹1.42 crore (based on October 2024 SDR value of ~$1.33). For the 242 passengers and crew, this translates to a baseline liability of over ₹377 crore for passengers alone.
2. Passenger Nationalities: The flight carried 169 Indian, 53 British, 7 Portuguese, and 1 Canadian nationals. Nationality may influence precise entitlements, but the minimum SDR-based payout applies universally.
3. Interim Payments: The convention mandates advance payments of at least 16,000 SDRs (~₹18 lakh) per passenger to cover immediate needs like funeral costs, to be issued promptly. Tata Group has announced an initial ₹1 crore per victim as immediate relief, which exceeds this requirement.
4. Higher Payouts for Negligence: If Air India is found negligent (e.g., due to maintenance issues or operational errors), compensation could exceed the minimum, with no upper limit. Families would need to prove fault in court, considering factors like the deceased’s age, income, and dependents.
5. Documentation Required: To claim compensation, families must provide:

• Boarding pass
• ID proof
• Nationality proof
• Banking information

6. Timeline: Interim payments may be disbursed shortly, but full settlements could take months due to claim verification.
7. Aircraft Insurance: The crashed Boeing 787-8 Dreamliner (VT-ABN, 2013 model) was insured for ~$115 million in 2021, covering hull damage, spares, and equipment. Total claims, including passenger and third-party liabilities, may exceed ₹1,000 crore. Risk is distributed among global reinsurers, with no single insurer bearing the full burden.
8. Third-Party Claims: The crash into a medical college campus caused additional ground casualties. These claims fall under domestic tort law or other aviation liability rules, not the Montreal Convention.
9. Travel Insurance: Passengers with personal travel insurance may receive additional payouts, ranging from ₹25 lakh to ₹1 crore for accidental death or up to ₹10 lakh for permanent disability.
10. Tata Group’s Response: Beyond the ₹1 crore per victim, Tata Group committed to covering medical expenses for the injured and supporting the rebuilding of the BJ Medical College hostel.
11. Criticism : Some argue the ₹1 crore interim payment is below the Montreal Convention’s mandatory minimum of ~₹1.5 crore, accusing Air India of offering less to secure quick settlements. Others note the airline’s liability could reach ₹1.8 crore per passenger based on updated SDR values.
12. Industry Impact: The incident may lead to higher aviation insurance premiums globally, as reinsurers adjust rates. The crash’s total insured loss is estimated at $130–$150 million, with ~10% borne by Indian insurers.
13. The compensation process will involve coordination between Air India, insurers, and global reinsurers, with final payouts depending on investigation outcomes and legal proceedings. Families are advised to consult legal experts to navigate claims, especially if pursuing higher compensation for negligence. For updates, check Air India’s official channels or the RBI website for related financial regulations.

NEWS LINK