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The Union Cabinet has cleared changes in the Air Carriage Act to ensure that Airlines will pay more in damages to passengers for flight delays, loss of baggage and accidental death.
Air carriers will now have to pay as per the latest international standards, which are based on the Montreal Convention -- a 1999 international treaty that governs airline liability and compensation.
For baggage loss, the maximum compensation to be paid will be Rs 90,000 - up from the current Rs 85,503. In case of flight delays, the amount will approximately be Rs 6 lakh - up from Rs 3.5 lakh. In case of death due to air crash or other accident, the compensation to be paid will be Rs 90 lakh - up from Rs 85.5 lakh.
According to the Montreal Convention, the compensations are based on SDR - or Special Drawing Rights - which is calculated in dollars and has to be converted into rupees at the current rate of exchange.
Each SDR is worth $1.2 and the number of SDRs awarded in each case have to be revised every five years since 2009.
India acceded to the Montreal convention in 2009 and the Act was accordingly amended.
This year, the International Civil Aviation Organisation reviewed the limits of liability for the first time as per the accumulated rate of inflation. Accordingly, the Indian Act had to be amended to bring in the new rates.