Synopsis: The Air India Flight 171 crash near Ahmedabad has become one of India’s deadliest airline disasters, with 241 lives lost. As compensation and damage claims mount, insurance liabilities may reach up to Rs 1,000 crore, marking it as India’s costliest air tragedy to date.
Crash Overview
On June 12, 2025, a London-bound Air India Flight 171, a Boeing 787-8 Dreamliner, crashed shortly after takeoff from Ahmedabad International Airport. The tragedy claimed 241 lives, including passengers, crew, and a few individuals on the ground. This incident not only shocked the nation but has also put the spotlight on the massive insurance liabilities that follow such catastrophic events.
Insurance Fallout: How High Can Claims Go?
- Air India has committed Rs 1 crore ex gratia compensation per deceased.
- The total insurance claims are expected to touch Rs 1,000 crore, factoring in hull damage and passenger compensation.
- The aircraft hull was insured for $211–$280 million, depending on configuration and condition.
- Liability insurance, which covers passenger claims, will be the biggest cost driver.
Compensation Under Montreal Convention
- India, a signatory to the Montreal Convention, 1999, mandates:
- Airlines to pay up to 128,821 SDRs (approx. $171,000 per passenger) in case of death/injury — regardless of fault.
- Additional compensation if negligence is proven.
Global Reinsurance Involvement
- Air India’s insurance programme is reinsured globally, with shares distributed among London, New York and other international markets.
- No single insurer bears the entire burden. Lead reinsurers typically shoulder 10–15% of the risk.
How Compensation Is Calculated
Passenger claims depend on several personal and financial factors:
- Age and income of the deceased
- Employment and educational status
- Number of dependants
- Marital and economic status
This makes each claim unique and case-specific.
Potential Ripple Effect
- A claim of Rs 1,000 crore or more could have a widespread impact on the global aviation insurance market.
- Could lead to premium hikes and stricter underwriting norms for Indian carriers in the future.
Disclaimer: This article is for informational purposes only and should not be construed as legal, financial, or insurance advice. For personal claims or advice, consult with a certified professional or the concerned authorities.
