Ahmedabad Plane Crash: How Much Compensation Air India May Have to Pay to Victims

Tata Sons-owned Air India may have to pay more to the victims of the AI171 flight crash, which was going from Ahmedabad to London on June 12 but struck a medical college just seconds after its takeoff from the runway. The crash in Gujarat's state capital killed at least 270 people, including 241 passengers. Only one British national of Indian origin miraculously survived the fatal accident.

The flight was carrying 169 Indian nationals, 53 British nationals, seven Portuguese nationals, and one Canadian national to London's Gatwick Airport.

Just hours after the crash, Tata Sons announced a generous ₹1 crore compensation for the family of each victim of the crash. Later, on June 14, Air India CEO Campbell Wilson said the company would make an interim payment of ₹25 lakh to each of the deceased's families in addition to the ₹1 crore.

However, legal experts now say that Air India and Boeing could be liable for more as per the Montreal Convention of 1999.

What is the Montreal Convention?

The Montreal Convention 1999 (MC99) created a unified, modern compensation system for international air passengers in cases of injury or death, while simplifying rules for baggage and cargo claims. It was created by the International Civil Aviation Organization (ICAO) — a United Nations specialised agency responsible for developing global aviation standards and regulations. The Convention replaced the outdated Warsaw Convention.

Though in force since 2003 and adopted by 132 countries, 60 states — including nations like Bangladesh, Sri Lanka, and Vietnam — have yet to ratify it. India became a part of the Convention in 2009.

MC99 for passengers offers generous compensation in the case of death or injury. MC99 abolished the arbitrary limits that existed under the Warsaw Convention system and established a two-tier strict liability regime. Claims in excess of the MC99 liability limits may succeed unless the carrier can show that it was not guilty of negligence in causing death or injury.

Thus, the possibility of uncompensated losses in a major aircraft accident case is significantly reduced.

MC99 liability limits are expressed in Special Drawing Rights (SDR). The value of the SDR is determined by the value of a basket of currencies important to the world’s trading and financial systems.

Under MC99, carrier liability is limited to SDR 113,100 for death or injury of passengers. To defend claims in excess of that amount, the carrier must show that the damage was not due to the negligence/wrongful act of the carrier or solely due to the negligence/wrongful act of another person.

MC99 also includes a number of other consumer-friendly provisions such as advance compensation payments and a wider choice of jurisdictions in which to bring claims. Liability limits are reviewed by ICAO every five years, ensuring MC99 remains modern and relevant.

In October 2024, when inflation exceeded the 10% threshold, the International Civil Aviation Organization (ICAO) revised limits to 151,880 SDR — up 17.9% from the 2019 revised limit of 128,821 SDR. The latter limit came into effect on December 28, 2024.

According to IMF's SDRs per currency unit as of June 16, the U.K. pound is equal to 0.9933120000, the U.S. dollar is equal to 0.7314790000, and the Indian rupee is equal to 0.0085031800. With these values, as of June 16, 151,880 SDR equals approximately £152,903, $207,634, or ₹1,78,61,553.

What Experts Say?

Air India could face unlimited liability to the victims’ families unless it can demonstrate that it was not negligent, James Healy-Pratt from the UK's Keystone Law told the Economic Times (ET).

“Under current legal presumptions, Air India is liable without limit unless and until it can provide evidence to the contrary. Only then can it cap its liability at 151,880 Special Drawing Rights (SDRs),” he said.

Earlier on June 17, Keystone Law in a statement said that their International Aviation team, led by James Healy-Pratt and Owen Hanna, is advising families affected by the Air India 171 tragedy, including those who lost multiple loved ones. The team is pursuing an evidence-based investigation, including potential claims against Boeing in US courts.

UK investigators are currently in India assisting with technical analysis and victim identification. The legal team is also reviewing early financial settlement offers by Air India’s insurer, Tata AIG, warning families to seek independent legal advice before accepting any payments.

“Our top priority is securing truth and justice for the families,” said Healy-Pratt.

Negligence-related claims fall under the jurisdiction of UK courts through tort law, according to Ashish Kumar Singh, co-founder and joint managing partner at Capstone Legal. Speaking to the ET, Singh explained that tort law addresses injuries or losses suffered by individuals. “After presenting evidence and undergoing cross-examination, the court can award compensation that significantly exceeds the insurance caps set by the Montreal Convention,” he said. “However, this legal process is complex and involves intricate questions of both fact and law.”

The paper cited Hitesh Girotra, vice president of aviation and specialty lines at Prudent Insurance Brokers, saying that since the crash involved a residential building, the airline also faces third-party property damage liability.

Jim Brauchle, a former U.S. Air Force navigator and aviation attorney at Motley Rice, told Mint that under the Montreal Convention, the airline bears strict liability of up to $200,000 in damages per passenger.

“To seek compensation beyond that amount, Air India must prove that neither the airline nor its employees were negligent in causing the crash,” Brauchle said. “It’s also important to note that the Montreal Convention applies only to Air India as the operator, not to any of the aircraft’s manufacturers.”

According to Houston-based law firm Smith & Hassler, the manufacturer (which in this case is Boeing) may be responsible if an aviation accident is caused by a defective part, such as a malfunctioning engine, navigation system, or landing gear. Lawsuits against aviation manufacturers typically fall under product liability law in the US.

Past Precedents

India has earlier seen courts order airlines to pay more compensation to aviation crash victims. According to a Times of India report, the 1988 Ahmedabad crash is one example. On October 19, 1988, Indian Airlines Flight 113 crashed near the airport, killing 133 of the 135 people on board, including crew members and pilots. Initially, Indian Airlines offered ₹2 lakh as full and final compensation to each victim’s family, the maximum amount permitted under the Carriage by Air Act, 1972. However, the families challenged this in court, leading to a landmark ruling. A city civil court increased the total compensation to ₹6 crore, dividing liability 70:30 between Indian Airlines and the Airport Authority of India.

Survivor Ashok Agrawal was awarded ₹60 lakh with 6% annual interest, though the Gujarat High Court later reduced this amount to ₹45 lakh in 2009 after an appeal by the airport authorities.

Similarly, ₹7.6 crore was awarded to the family of a passenger in the Air India Express crash at Mangalore airport that killed 158 people in 2010.

In the case of the Air India Express Flight 1344 crash in Kozhikode in 2020, the Supreme Court issued notices to Air India over a petition seeking compensation of at least ₹1.34 crore per victim, as prescribed by the Montreal Convention. The 2023 petition argued that the airline's previous compensation offers were inadequate and did not align with international standards.