On 12 June, a tragic Air India crash claimed the lives of 241 people, who were travelling from Sardar Vallabhbhai Patel International Airport (AMD) to London Gatwick Airport (LGW). In the aftermath, the ruins are being examined and more facts are being revealed about losses suffered – generating speculation that the catastrophe will be India’s most expensive aviation payout.
The Price of Tragedy
Like many other airlines, Air India’s insurance coverage is spread across global markets through a large network. This ensures that no single insurer carries the entire risk; rather, the financial impact of an accident is absorbed globally.
Physical aircraft liabilities from the crash have been estimated between $80 million and $280 million, depending on valuation factors such as age, condition, and configuration. The Boeing 787-8 Dreamliner involved was a 2013 model, insured for approximately $115 million in 2021.
Air India has announced an interim compensation of Rs 1 crore to the families of each person who lost their lives in the crash – with only one survivor of the incident. However, final amounts are yet to be determined under the Montreal Convention of 1999. Compensation will be calculated under Special Drawing Rights (SDRs), which is currently valued at 1,28,821 SDRs or Rs 1.47 crore.
As the aircraft crashed into a residential apartment, it is expected that there will be further claims to be made for third-party property damage and loss of life. It is not yet known how many people on the ground have been killed.
It remains too soon to determine the full amount that this disaster will cost, with widespread wreckage and damage continuing to be recorded.
Ongoing Investigations
Official enquiries into the crash and its cause are underway as the world seeks an answer to this tragedy.
India’s Civil Aviation Minister, Ram Mohan Niadu Kinjarapu, has said that the flight data recorder, or black box, has been recovered within 28 hours from the accident site by India’s Aircraft Accident Investigation Bureau (AAIB).
The black box is expected to provide information about the flight and what went wrong. Upon finding the data recorder today, Kinjarapu declared:
“This marks an important step forward in the investigation. This will significantly aid the inquiry into the incident.”
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