China Eastern Airlines crash: hopes lost, compensation process begins
- No survivors among the 132 people on board have been found since Monday’s tragedy
- Insurers have been told to spare no effort in helping families with their claims
On Tuesday, China’s top insurance regulator called on the industry to make an all-out effort to help families with their insurance claims.
A total of 21 insurers have also launched their own investigations and are taking part in search and rescue operations, according to the China Banking and Insurance Regulatory Commission.
The amount of compensation paid out to families is likely to be higher than the country’s legally obligated range of up to 400,000 yuan (US$62,800) per victim.
This maximum was raised from 70,000 yuan in 2006, but the amount has still been widely criticised for being too low and failing to reflect inflation and income levels.
In practice, airlines have generally paid out more.
The last fatal crash in China was in 2010, when a Henan Airlines Embraer jet carrying 96 passengers crashed in Yichun in Heilongjiang province in northeast China.
In all, 44 people died and another 52 were injured. The compensation for each deceased victim amounted to about 960,000 yuan, a new benchmark for the time.
In 2004, when a China Eastern Airlines plane crashed in Baotou killing all 47 passengers and six crew members, the airline offered victims’ families 211,000 yuan in damages, over three times the legally required amount at the time.
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Under the 1999 Montreal Convention covering compensation for victims of air disasters – adopted by 137 members of the International Civil Aviation Organization including China – airlines are liable to pay up to 128,821 in special drawing rights, a reserve asset created by the International Monetary Fund, for each death.
As of Monday, that was equivalent to about US$178,000 or 1.1 million yuan.
International airlines have often settled with families for higher than this amount.
The families of some Chinese victims on board Malaysia Airlines flight MH370, which disappeared en route from Kuala Lumpur to Beijing in 2014, accepted about 1.5 million yuan each in compensation from the airline.
Others have opted to forgo the settlement and sue the airline instead.
After the crash of Lion Air Flight 610 into the Java Sea in 2018, Boeing reached a settlement with some victims’ families for about US$1.2 million each.
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Compensation for Monday’s MU5735 flight victims will also vary based on whether they had bought optional insurance for the flight.
According to the China Eastern Airlines website, family members of passengers who had paid 30 yuan for travel insurance when they bought their tickets would be entitled to 2 million yuan in damages in case of a fatal disaster.
Families could receive more than twice that amount for insurance coverage costing 100 yuan.
