Fliers to get global compensation rates for mishaps, delays
14 March 2016
Parliament on Friday passed the Carriage by Air (Amendment) Bill, nine days after the Rajya Sabha returned it to the lower house with the amendments.
The bill after coming back to the Lok Sabha on 2 March was adopted by a voice note. It promises increased compensation to air travellers in case of death, injury, lost baggage or even inordinate delay in flights.
Originally passed in Lok Sabha in December 2015, it was subsequently directed back to the Lok Sabha by the Rajya Sabha with amendments.
Once it becomes an Act, Indian carriers will have to pay compensation amount that is equivalent to the rates paid by their global counterparts.
The act 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.
Among other things, the compensation for death in an air accident and the amount would be calculated on the basis of SDR (Special Drawing Rights). The bill intends to raise the liability limit for damage in case of death or bodily injury for each person from 1,00,000 SDR to 1,13,100 SDR.
The currency value of the SDR is based on market exchange rates of a basket of major currencies – the US dollar, the euro, the Japanese yen and the pound sterling.
As per the latest exchange rate, the compensation limit rises to more than Rs1 crore. One SDR is equivalent to around Rs 93.
Earlier this month, while piloting the bill in the Rajya Sabha, civil aviation minister Ashok Gajapthi Raju had said it would bring a legislative character to international standards with respect to compensation for air passengers.
While the liability for delay in carriage for each person is proposed to be rise to 4,694 SDR from 4,150 SDR, in case of case of destruction, loss, damage or delay of baggage it is from 1,000 SDR to 1,131 SDR.
The liability in case of destruction, loss or delay in relation to the carriage of cargo has been raised from 17 SDR to 19 SDR.
The liability limits are revised once every five years by the UN body International Civil Aviation Organisation (ICAO) on the basis of a determined inflation factor of 13.1 per cent, triggering an adjustment in the limits.