Suspicion surrounds initial compensation

ISLAMABAD: Airblue will start paying a sum of Rs500,000 to the next-of-kin of each of the 152 victims of Flight ED-202, which crashed on July 28, from today (Wednesday) as interim financial assistance, which may increase to Rs4 million after legal issues are settled.

The assistance is designed primarily to reach out on the eve of Eidul Fitr to families of the deceased who may be facing financial constraints – given that the government-announced compensation of the same amount never materialised.

However, this gesture is being looked at sceptically by many of the families.

An official of the private airline told The Express Tribune that the company may announce the final compensation amount in the next two months. He hinted that the amount may be as high as Rs4 million. Airblue’s chief operating officer, Shahid Khaqan Abbasi, had said that the minimum compensation would be Rs1 million.

On the other hand, the victims’ families are apprehensive that, by giving Rs500,000 as financial assistance right now, the company may exploit in court any case against the final compensation amount when it is eventually announced.

However, the airline’s general manager, Raheel Ahmad, said Airblue would do no such thing. He said that the interim assistance was not obligatory – and if the families did not want to accept it, they may wait till the announcement of the final figure.

“The Airblue management has decided to financially assist the aggrieved families on Eid – especially those who lost their bread earners in this crash and this amount has nothing to do with the real compensation,” the staff of Airblue was reported to have said to the victims’ next-of-kin over the phone. However, instead of coming as some sort of solace, the call led to confusion, and fears that the company may exploit such a gesture in court.

Another issue that has arisen is that, while the families are seeking a compensation package under the Montreal Convention – which sets the global parameters of paying compensation to crash victims’ heirs – the airline’s management insists that the global agreement isn’t applicable in this case.

Under the Montreal Convention, of which Pakistan is a signatory, the compensation would come to Rs15 million per head. An Airblue official from the legal department, however, said that the Montreal Convention was not applicable on domestic flights – and flight ED202 crashed plane en route Islamabad from Karachi.

Meanwhile, it has also been reported that a so-called legal firm has been calling the families of the victims and offering its services in the effort to extract as much as Rs8 million as compensation – and in return asking for 25 per cent of the compensation as fee.

It is instigating the families to knock on the Supreme Court’s door, as the Montreal Convention was applicable on domestic flights too.

Airblue’s general manager said that the company was legally bound to pay Rs1 million. He warned that those families who wish to go to the court may not, if they lose the case, be entitled to the final announced compensation – which could be at least three times more than what the company was legally bound to pay.

The reinsurer of Airblue is the Willis Group, one of the three leading aviation reinsurers in the world. The reinsurer would also pay the hull value of the plane, an Airbus A321-200, which has been calculated at $35 million. The hull value includes instruments, radios, autopilots, wings, engines, and other equipment attached to or carried on the plane as described in the policy.

Published in The Express Tribune, September 8^th, 2010.