Following the tragic crash of Air India flight AI 171 on June 12, the Tata group airline has so far released the Rs 25-lakh interim compensation to the families of 147 of the 229 passengers who perished in the crash and 19 who were killed at the accident site.
The crash claimed a total of 260 lives–229 of the 230 passengers on board the Boeing 787-8 aircraft, 12 flight and cabin crew personnel, and 19 persons on the ground. It was the worst aviation disaster involving an Indian airline in four decades.
“Air India has, so far, released the interim compensation to the families of 147 of the 229 deceased passengers and also the 19 who lost their lives at the accident site. In addition, the requisite documents of 52 others have been verified, to whose families the interim compensation will be released progressively,” Air India said in a statement Saturday.
This interim payment will be adjusted against any final compensation that may be announced for the next of kin of the crash victims.
The exact compensation and legal proceedings vary depending on the jurisdiction and whether the flight was domestic or international, according to experts. Airlines typically maintain liability insurance that covers passengers or their families in the event of injury or death, regardless of the cause of the accident.
Compensation is largely governed by international or national aviation laws and the airline’s own policies. Under the Montreal Convention, applicable to most international flights, airlines are strictly liable for damages up to a certain threshold — currently around SDR (special drawing rights) 128,821 or approximately Rs 1.50 crore per passenger — and can be held liable for higher amounts if negligence is proven.
In cases where foreign nationals are among the deceased, their families have the option to file claims in jurisdictions such as the country of the carrier, the place where the ticket was purchased, or the home country of the victim. Since nationals from Britain, Canada, and Portugal were among the victims, compansation-related legal proceedings in courts of various international jurisdictions cannot be ruled out.
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According to insurance industry sources, the crash is expected to result in total claims of around Rs 4,000 crore (approximately $470 million), making it one of the most significant insurance events involving an aircraft accident. The aircraft hull alone is estimated to cost insurers and reinsurers about $80 million, with the engines valued at an additional $45 million. Liability claims related to passenger deaths are expected to reach approximately $350 million, though the final amount may vary depending on the number and nature of claims filed and the jurisdictions involved.
Apart from the interim payout announced by the airline after the crash, its parent Tata Sons also pledged an ex-gratia payment of Rs 1 crore for each of the deceased. The payment will be through the Rs 500-crore AI-171 Memorial and Welfare Trust set up by Tata Sons. Apart from the ex-gratia compensation, the trust will support the rebuilding of the BJ Medical College hostel infrastructure that was badly damaged in the accident.
“The Trust will also provide aid and assistance for alleviation of any trauma or distress suffered by the first responders, medical and disaster relief professionals, social workers, and governmental staff who provided invaluable institutional support and service in the aftermath of the accident,” Air India said.
