Air passengers insurance increases eight-fold

Kathmandu, Dec. 14

 Nepali air passengers will get compensation at par foreigners from December 15.

The insured amount of passengers flying to and fro Nepal will reach Rs. 17.48 million in case of death and fatal injuries from current Rs. 2.3 million, said Buddhi Sagar Lamichhane, Joint Secretary at the Ministry of Culture, Tourism and Civil Aviation.

The new provisions of aviation insurance are the result of the Montreal Convention 1999 (MC99) which was approved by the Parliament in the last week of August this year.

 According to the International Civil Aviation Organisation (ICAO), the MC99 imposes minimum liability of 113,100 dollars where 1 dollar is equivalent to 1.38 SDR (Special drawing Right). SDR is in use in the international aviation covering mandatory aircraft insurance for public transport aircraft.

"The new rules have increased the liability of airlines companies to Rs. 725,504 in case of flight delay, Rs. 2,836 for the loss and damage of cargo, and Rs. 172,025 for every checked in baggage loss or damage," said Lamichhane.

The insured amount has suddenly gone up, at par the international passengers or aviation practices, after Nepal became part of the MC99. These all liabilities are mandatory.

However, the second tier liabilities can be unlimited as the passengers can file a case at the court claiming much higher amount.

"The new convention has a provision which enables the passengers to choose the court to settle the legal requirement. They can file the case at a court in their own country thus reduced the complex process to get compensation. This is a consumer-friendly provision," Lamichhane said.

In addition to it, it has authenticated the e-payment system in ticketing and cargo handling.

The Warsaw Convention 1992 is only in French language whereas the new convention is available in six languages: English, French, Spanish, Arabic, Chinese and Russian.

Nepal has become the 135^th country to ratify and implement the Montreal Convention.

Among the SAARC members, Nepal has become the fourth nation to implement it after Pakistan, India and the Maldives.

ICAO reviews the liability limit for the air passengers and cargo in every five years to make it relevant and up to date, the minimum liability on the death of a passenger or injuries was 100,000 dollars in 1999 which was increased to 113,100 in 2009.

Published in The Rising Nepal daily on 15 December 2018.