Thursday, March 27, 2014

Malaysia Airlines disaster: How much is a passenger worth?

How much is the life of a passenger worth to the airline industry?
About $190,000, if you consult the Montreal Convention, the legal document that binds the aviation industry to minimum compensation payouts to loved ones of airline crash victims. But legal proceedings can mean a very different outcome.
The Montreal Convention requires airlines to provide compensation of about $US175,000 ($190,000) for passengers suffering injury or death as a result of an airline accident.
The damages payment is made automatically, without relatives or the injured having to prove negligence or fault on the airline's behalf. The convention wording, put together by the International Civil Aviation Organisation (ICAO) says the automatic payment "avoids the situation where passengers need to pursue long and onerous legal claims".
ICAO says "proven damages beyond this amount can be claimed and the burden of proof lies with the air carrier to show that it was not negligent".
Geoffrey Thomas, editor of the Airline Ratings website, said anything other than an "act of god" would spark lawsuits against an airline and/or the manufacturer of an aircraft.
He said airlines or manufacturers were found to be liable more often than not.
"Typically, when a plane crashes, there is a problem somewhere with either the airline's procedures and security, or the manufacturer," he said.
He said airlines were obliged to provide a timely payment to cover expenses of passengers' relatives in the short term.
"Usually there is an initial payment and this helps out with expenses; then there is a longer-term ICAO payment; and then major legal payouts can take years to settle," he said.
26/03/14 Richard Blackburn/Lindsay Murdoch/Sydney Morning Herald
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