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Air passengers to get higher compensation for delays, baggage loss

The ‘Carriage by Air (Amendment) Bill, 2015‘, has been passed by the parliament. It wascleared by the Lok Sabha in December 2015 and Rajya Sabha recently.

Implications:

Once this bill gets the nod of the president and becomes an act, the law would require Indian

carriers to pay compensation amount that is equivalent to the rates paid by their global

counterparts.

This bill would enhance compensation for air travellers in case of death, injury, lost baggage or

even inordinate delay in flights.

The legislation would allow the government to revise the liability limits of airlines in line with

the Montreal Convention, which was acceded to by India in May 2009.

Background:

The Bill amends the Carriage by Air Act, 1972. The Act regulates carriage by air and gives effectto the Warsaw Convention, 1929, the Warsaw Convention as amended by the Hague Protocol,

1955, and the Montreal Convention, 1999.

The Act also provides for application of the international rules to domestic travel, subject to

exceptions and adaptations.

Financial implications:

The compensation in case of death in an air accident or injury will go up to around Rs. 1.05

crore, up from the present Rs. 93 lakh. This amount will be computed on the basis of SDR

(Special Drawing Rights). The currency value of the SDR is based on market exchange rates of

a basket of major currencies – U.S. dollar, euro, Japanese yen and pound sterling. One SDR is

equivalent to Rs. 93.

The liability for flight delays will increase to Rs. 4.36 lakh from Rs. 3.86 lakh. In case of

destruction, loss or inordinate delays in case of cargo carriage, the liability amount has been

raised from Rs. 1,581 to Rs. 1,767.

For destruction, loss, damage or delay of baggage, the domestic airlines will have to pay Rs.

1.05 lakh from the present Rs. 93,000.

Montreal Convention:

The Montreal Convention 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 Convention also

provides for reviewing the limits of liability of the air carriers every five years. India acceded tothe Montreal Convention in May 2009.

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Sources: the hindu.