HT explains: How compensation is determined for air crash victims

Air India Flight 171 crashed shortly after takeoff near Ahmedabad, killing 241. Investigations ongoing, with compensation available under Montreal Convention.

The Air India Flight 171 was airborne for barely 40 seconds when it met with a horrific crash, just about 2 kms from the Ahmedabad airport. All but one of the 242 people on board the Boeing 787-8 Dreamliner were instantly killed in India’s worst aviation disaster in several decades.

The Air India Flight 171 was airborne for barely 40 seconds when it met with a horrific crash, just about 2 kms from the Ahmedabad airport (PTI)

Investigations are underway and former director general of Aircraft Accident Investigation Bureau (AAIB) Group Captain Aurobindo Handa (Retd) spoke to PTI on the investigation process. Handa said going by the visuals of the crash, the aircraft has been very badly damaged by fire and stitching together the evidence would be a tedious process. “In all probability and in fairness, the investigation is likely to be a long-drawn process,” he said.

Notwithstanding the investigation, the sole survivor of the crash and kin of those who lost their lives in the unfortunate crash, are eligible for monetary compensation. The Montreal Convention is a benign statute that allows victims or their kin to claim compensation irrespective of what the investigations eventually reveal. “It’s a strict liability or a no-fault liability,” said Adithya Variath, a legal expert and academic, who specialises in Air and Space law.

Variath explained that what this means is that a fixed compensation amount is mandatorily to be dispensed to air crash victims/their kin, even if the investigations eventually find no fault with the airline, no human/pilot error, or negligence of part of any of the other players such as the manufacturer of the Dreamliner, the Boeing Company etc.

“That fixed amount currently stands at 151,880 SDR (Special Drawing Rights) in case of death or injury,” said Ankita Kumar, a commercial attorney who specialises in the Aviation and Aerospace sector. She explained that the SDR is not a currency in itself. However, it is an international asset, set by the IMF (International Monetary Fund), that holders can exchange for currency. This exchange rate is based on a basket of five international currencies (US dollar, Euro, Chinese Renminbi, Japanese Yen, and the British Pound Sterling), and therefore varies on a daily basis (accounting for different compensation amounts, in rupees, being cited in various news reports). As of today, the above mentioned SDR amounts to ₹18544262.07 (Over one crore, eight five lakhs) Tata Sons, the parent company for Air India, announced a compensation of one crore to all deceased i.e passengers and ground victims. In addition (check), Air India offered interim support of 25 lakhs to the victims/kin. The airline will be bound to release the full amount determined in SDR, as of the day of crash/day of final installment.

Are there any circumstances under which an airline can deflect from their liability under the Montreal Convention?

While it is not a possibility in the recent tragedy, given the magnitude of the crash, in the past airlines have used a few defences to deny compensation. This has forced passengers/kin to approach courts.

For instance, the Montreal Convention, in the wordings of the statute, specifically mentions bodily harm. Therefore, if a passenger, who is not physically harmed due to turbulence, rough landing, etc., but makes a claim under psychological or emotional trauma, this could be contested. It is then left for the local courts to decide how to interpret the Convention. When faced with a similar incident, where a woman claimed she suffered post-traumatic stress disorder as a result of an emergency evacuation, an Austrian court granted compensation, even in the absence of physical injury.

Can crash victims claim compensation above the strict liability?

While not speculating on the AI crash since the investigations are still underway, experts say that air crash victims/kin are eligible for higher compensation, based on where fault eventually lies. In cases where fault is found with the airline, victims/kin can seek several civil remedies. The SDR promised by the Montreal Convention does not restrict the passenger’s right to seek higher claims. “They can approach civil courts and file personal injury and wrongful death cases which broadly come under Law of Torts,” said Variath.

He explained that a ‘tort’ is essentially a civil breach (such as negligence on the part of an airline, failure to maintain or service aircrafts, etc), due to which a person suffers harm, and for which he/she can then seek monetary compensation. However, such cases are long-drawn and civil suits from the 2010 Mangalore crash (Air India Express Flight 812), are still lingering in Indian courts.

“In case of any manufacturing defect, such as a fault on the part of Boeing, product liability suits can be filed,” said advocate Yeshwanth Shenoy. Such claims can be brought against Boeing in their jurisdiction, which is the USA. “Product liability laws are more stringent in the USA. The courts also have lower pendency rates, which could potentially lead to speedier justice and higher compensation in the USA versus filing a case in India,” Shenoy explained. He added that many law firms in the USA take on cases on a contingency basis, which means the passenger/kin would only be required to pay if and when the suit is won. The payment is usually fixed at a certain percentage of the compensation.

“Class action suits too are a possibility, wherein passengers come together and file a single suit, rather than individual cases instituted in various courts,” said Kumar. She also explained that after such disasters, the government usually sets up special committees or commissions. These bodies assist in investigations and also suggest policy changes. At times, such a committee may also suggest setting up an ad hoc judicial body to assist the court compensation proceedings. But while such bodies can speed up the process, the actual process of deciding claims plays out in the civil courts. At times, special benches are set up for such purposes.

Shenoy said that under civil law, cases of compensation can also be filed at consumer courts. The Consumer Forums are essentially quasi-judicial bodies, meant to dispense speedier justice, sans the many procedural nuances of civil courts. Consumers have a right to receive certain services, in exchange for payment. “If there is any deficiency in these services,” a passenger can make claims in a consumer court.

Shenoy has fought one such landmark case, that of passenger Mahendra Kodakany, who lost his life in the ill-fated Mangalore crash. Shenoy explained that he filed the case in the National Consumer Disputes Redressal Forum, which was then appealed in the Supreme Court. “It took nine years to fight the case and the compensation was the highest received, in a crash, at a consumer court - a total of ₹7,64,29,437 (seven crore, sixty four lakhs, twenty-nine thousand four hundred thirty seven rupees), along with interest.”

The amount of compensation is decided on various factors including the earnings of the victim at the time of the accident and his future potential earnings, based on age, etc. Despite the fact that seven crores sound like a large amount, Shenoy is quick to add that, “Indian courts remain conservative when it comes to the valuation of human life.” He also reminded us of the toll --- emotional, mental and physical --- that cases and long-drawn battles can have on the family.

Advocate Jehan Fulwadiwala, who has represented several clients at consumer forums, echoed his views. He says, “I have never represented an airline or a passenger. However, even fairly simple cases can take months or even two to three years to be decided. “I have personally appeared this year (2025) for cases that were filed in 2019.”

He cited many reasons for delays - a major impediment is lack of judges and members (a bench) in many consumer forums. Eventually when a bench is selected and hearings resume, the backlog is such that there is a gap of three months between each court hearing. The process is further exploited as advocates also seek several adjournments, further delaying the matter.

Victims on the ground

Unfortunately, the victims on the ground have no recourse to the Montreal Convention and, therefore, no strict liability clauses in their favour. Since they are not consumers, they cannot approach consumer forums either. Tata has announced compensation for the many victims on the ground who passed away as the plane slammed into a hostel for medical students.

“However, if they want higher claims, they have to rely on civil suits,” explains Variath. The process for such victims can be particularly daunting and it will likely take years for suits to be decided.

The Air India crash is the largest such air tragedy in recent times, in India. If and when such cases are decided, they could set new precedents, and could pave the wave for stronger rights for fliers.