Mumbai: After the tragic crash of a London-bound Air India Boeing 787 (VT‑ABN) shortly after takeoff from Ahmedabad on June 12, 2025, several questions have emerged about airline liability and passenger compensation. Experts confirm that payouts will follow the Montreal Convention (1999)—the international treaty India acceded to in 2009.
The aircraft had 242 people on board—169 Indians, 53 British, seven Portuguese, and one Canadian.Under the Montreal Convention, each passenger is entitled to a minimum of 128,821 Special Drawing Rights (SDRs), an IMF unit valued at roughly USD 1.33 as of October 2024. This equates to about USD 171,341 (approximately ₹1.42 crore) per passenger.
However, recent reports suggest actual compensation could be higher. The New Indian Express estimates payouts might reach ₹1.8 crore (151,880 SDRs), while Business Standard and Moneycontrol round it to ₹1.5 crore per victim. These variations reflect slight differences in SDR values and interim payouts structured within the treaty’s framework.
Montreal Convention stipulates interim payments of at least 16,000 SDRs (~₹18 lakh) per passenger to provide immediate relief—intended to support funerals, urgent expenses, or temporary dislocation. The final total may increase if negligence can be proven, adding discretionary compensation awarded by courts
Beyond passenger claims, extensive liability insurance applies. The hull-all-risk policy covers the aircraft’s physical loss, while liability coverage addresses passenger injury, fatalities, baggage damage, and third-party liability for ground casualties, considering the crash hit a hostel and surrounding buildings.
The Boeing Dreamliner VT-ABN, built in 2013, was insured for approximately USD 115 million in 2021. Yet hull valuations for 787 aircraft typically range from USD 211–280 million depending on configuration and age. If the plane is deemed a total loss, insurers may pay the agreed hull value.
Claims involving both hull and liability could push Air India’s total payout liability to more than Rs 1,000 crore ($211–280 million). NDTV and Economic Times report that this may become India’s costliest aviation insurance claim.
Underpinning these large claims is Air India’s comprehensive global insurance programme—covering a USD 20 billion fleet with a USD 30 million annual premium. These policies are reinsured internationally; no single insurer shoulders the full risk.



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