Parliament cleared on Friday a bill providing for increased compensation to air travellers in case of baggage loss, delay in flights, injury and death, mandating Indian carriers to pay rates equivalent to global standards.
The Carriage by Air (Amendment) Bill was passed in Lok Sabha on December 2015 and by the Rajya Sabha, with certain amendments, on March 2. The bill, along with the amendments, came back to the Lower House on Friday and was adopted by a voice vote.
Once the bill is approved by the President, airlines will have to pay compensation of more than Rs one crore in case of death or bodily injury to an air traveler.
Globally, air carriers pay compensation under special drawing rights (SDRs), whose currency value is based on market exchange rates of a basket of major currencies -- US dollar, Euro, Japanese Yen and Pound Sterling. With latest exchange rate, one SDR is equivalent to about Rs 93.
The liability for delay in carriage for each person will go up from 4150 to 4694 SDRs, which means the new compensation rate will rise to more than Rs 4.3 lakh against Rs 3.85 lakh.
The liability in case of destruction, loss, damage or delay with respect to baggage for each person has also been increased from 1000 to 1131 SDR while the same for cargo will go up from 17 to 19 SDR.
The liability limits are revised once every five years by the UN body, International Civil Aviation Organisation (ICAO), on the basis of a determined inflation factor of 13.1 per cent, triggering an adjustment in the limits.
India needed to amend its act after signing the Montreal Convention that establishes airline liability in the case of death, injury or delay to passengers or in cases of delay, damage or loss of baggage and cargo.
The amendment Bill sought to empower the central government to revise the limits of liability for airlines and compensation as per the Montreal Convention. It also provides for the central government to make rules to carry out provisions of the Act.