On June 12, a terrible plane crash near Ahmedabad Airport shocked the nation. Air India flight AI-171, a Boeing 787-8 Dreamliner flying to London, crashed right after takeoff. All 241 people on board lost their lives.
Additionally, some residents in the nearby Doctors’ Hostel also died after the aircraft fell on the building. Following this tragic event, Air India announced ₹1 crore compensation for each victim’s family.
However, this is just initial support—the total insurance claim could go as high as ₹1,000 crore.
Compensation Under International Rules
The final compensation will be decided under the Montreal Convention of 1999, which India adopted in 2009.
What Is the Montreal Convention?
The Montreal Convention is an international law that outlines compensation for deaths or injuries caused by aircraft accidents.
According to this law, the airline must pay compensation up to 1,28,821 Special Drawing Rights (SDR) for each passenger.
As of October 2024, 1 SDR was equal to $1.33 (around ₹111), so the total compensation per person could be about ₹1.43 crore. If the airline is found to be at fault, the amount can be even higher.
How Many People Were Onboard?
At the time of the crash, the aircraft had 242 people onboard. These included 169 Indian citizens, 53 British citizens, 1 Canadian, and 7 Portuguese citizens. Sadly, no one survived.
How Does Aircraft Insurance Work?
Air India has insured its fleet under a global aircraft insurance program worth $20 billion. This includes two main types of insurance:
Hull Insurance – Covers damage to the aircraft itself.
Liability Insurance – Covers compensation for passengers and third-party damages (such as buildings or vehicles on the ground).
According to experts, a new Boeing 787-8 Dreamliner costs between $211 million and $280 million.
However, the insured value of the 2013 model aircraft (registration VT-ABN) was about $115 million in 2021.
Who Pays the Compensation?
Air India’s insurance is spread across several global insurance companies. Each company covers a portion—ranging from 1.5% to 15%—of the total claim.
Because of this, the financial burden of this accident will be shared by insurers around the world.
How High Could the Total Compensation Go?
Apart from the cost of the destroyed plane, the major expense will be paying compensation to victims’ families and third parties.
The total payout could reach ₹1,000 crore, making it one of the most expensive aviation disasters in Indian history.
How Will the Final Compensation Be Calculated?
The final compensation for each victim may differ. It is usually based on various factors like the passenger’s age, income, job, family responsibilities, and number of dependents.
This tragic event not only marks a dark moment in Indian aviation but also raises serious questions about air safety and insurance practices.
Going forward, this case could lead to stricter safety and insurance rules both in India and internationally.
