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Aviation Ministry Nears Resolution of AI-171 Crash Compensation Dispute, Secretary Tells House Panel

Aviation Ministry Nears Resolution of AI-171 Crash Compensation Dispute
The Union Ministry of Civil Aviation is approaching a resolution in the protracted dispute over compensation for the families of victims of the AI-171 crash, the ministry’s secretary informed a parliamentary committee last week. This assurance came amid growing concerns from the victims’ families, who have expressed unease about being compelled to relinquish their right to pursue legal action in exchange for accepting Air India’s final settlement offer.
Anjali Rupani, widow of the late Vijay Rupani, former chief minister of Gujarat and one of the 242 passengers aboard the ill-fated flight, appeared before the Standing Committee on Transport, Tourism, and Culture to seek intervention from Aviation Minister K. Ram Mohan Naidu. Committee members reported that Secretary Samir Kumar Sinha assured them that families “won’t have to face this trouble from Air India,” indicating that the ministry was close to finalizing an agreement with the airline.
Background of the Tragedy and Compensation Dispute
The crash occurred on 12 June last year when a Boeing 787-8 Dreamliner bound for London crashed seconds after taking off from Ahmedabad, resulting in 260 fatalities. This incident stands as the deadliest accident involving an Indian carrier in four decades. The tragedy was further compounded when the aircraft struck a nearby hostel at B.J. Medical College.
Since Air India initiated its final settlement offers in October, the compensation process has been fraught with controversy. Families were initially provided an interim payment of Rs 25 lakh per victim, along with a Rs 1 crore ex-gratia payment from the Tata-run AI-171 Memorial and Welfare Trust. However, the airline required families to sign a receipt, discharge, and indemnity document that effectively waived their rights to present and future claims not only against Air India but also against Boeing, engine manufacturer GE, Honeywell, Safran, the Union of India, and the Ahmedabad airport operator. This clause sparked objections from several families, who argued that accepting compensation under these terms would force them to forgo their right to seek accountability, particularly before the Aircraft Accident Investigation Bureau (AAIB) completes its inquiry.
Radhika Mishra, daughter of Vijay Rupani, had previously appealed to Tata Sons chairman N. Chandrasekaran to remove the waiver clause. In response, Air India stated that families were free to await the investigation report before accepting any settlement, with no deadline imposed for acceptance.
Investigation Delays and Safety Concerns
The resolution process has been further complicated by ongoing investigations into the Boeing 787-8 Dreamliner’s engines in the United States, which have delayed the release of the final crash report beyond the one-year deadline. This delay has attracted scrutiny from market observers concerned about the integrity of the investigation and has raised questions about Boeing’s reputation, particularly regarding the Dreamliner’s safety record. Competing aircraft manufacturers have seized the opportunity to emphasize their own safety standards. The AAIB is expected to submit a status report this week, with a comprehensive final report anticipated within the next three months.
Earlier this year, the parliamentary committee recommended the establishment of an independent high-level panel on aviation safety, citing the Ahmedabad crash alongside nearly 100 safety lapses recorded in a single year and recurring technical issues. The committee also advocated for the introduction of a passenger rights charter under the Bharatiya Vayuyan Adhiniyam, 2024, and called for expedited recruitment at the Directorate General of Civil Aviation (DGCA).
Under the Montreal Convention, Air India is strictly liable for compensation up to approximately Rs 1.9 crore per victim. However, the ongoing dispute and delays in the investigation have left many families in a state of uncertainty as they await both compensation and definitive answers.

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