New Delhi: Air India has received an insurance payout of 125 million dollars to cover hull and engine losses following the devastating air crash near Ahmedabad. The payment has been made by a consortium of global reinsurers and Indian general insurance companies as part of the airline’s insurance settlement for the aircraft destroyed in the accident.
The compensation covers damage to the aircraft structure and engines and is expected to help the airline manage repair and replacement costs while limiting operational disruption. Of the total amount, around 80 million dollars has been paid towards the aircraft hull, while approximately 25 million dollars accounts for losses related to the two engines.
In addition to the hull and engine settlement, insurers have already disbursed about 25 million dollars, equivalent to roughly ₹225 crore, as interim compensation to the families of passengers who lost their lives. The compensation process remains ongoing, and industry officials expect the overall payout to rise significantly once all passenger claims are fully processed.
Earlier assessments had projected that Air India’s total insurance claim from the Ahmedabad crash could reach as high as 475 million dollars, or about ₹4,275 crore. This figure includes an estimated 350 million dollars in liability claims linked to compensation for passengers who died in the accident.
The ill-fated Ahmedabad to London Gatwick flight AI-171, operated using a Boeing 787 Dreamliner, crashed shortly after departure, killing 260 people. The fatalities included 241 passengers and 19 crew members. Only one passenger survived the crash. Among those on board were 169 Indian nationals, 53 British citizens, seven Portuguese nationals, and one Canadian.
The aircraft was completely destroyed in the crash. At the time of the incident, one of the engines had recently undergone maintenance, and a temporary replacement engine was installed. As part of the settlement, ownership of the serviced engine now rests with the reinsurers, who may recover part of the loss through resale.
Air India’s insurance cover is among the largest in the aviation sector. The airline currently holds a 20 billion dollar hull insurance policy along with a 1.5 billion dollar liability policy. Most of this risk has been reinsured by international insurers, with Indian insurers also holding significant shares.
Aviation insurance experts note that compensation is typically payable to both airlines and victims’ families, regardless of whether pilot error is eventually established, ensuring financial relief in the aftermath of such tragedies.
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