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Aviation Insurance
Sunday, July 1, 2007
Still no news

The official introduction of the 1999 Montreal Convention should by now have caused huge ructions in the local aviation market.

Yet there is still nothing from the Aviation Authorities or the Commercial Aviation Association, in spite of the huge importance of the change in the regulations. It makes one wonder what the point of these organisations is.
My last article (see Insurance Times & Investments Volume 20.3 April 2007) gave details of what is entailed, but some readers raised queries, one of which was whether the compensation amounts were minimum or maximum.
There is no doubt that the wording of the Convention (in RSA it comes in as The Carriage by Air Act Amendment) means that the figures are maximum amounts and that courts may well award less.
In brief the amounts are:
• Injury: SDR100 000, equivalent to about R1 125 000.
• Baggage: SDR1 000, or about R11 250
• Delay: SDR4 150 (R47 000)
• Cargo: SDR17 per kg, or R191

For instance, passenger injury is subject to compensation under Article 21.1 “for damages...not exceeding SDR100 000 for each passenger...”
For baggage the expression used is “..liability ...is limited to SDR1 000...” and for Delay the same expression is used. In my view this clearly indicates that the amounts stated are maxima in that specific category. One would not expect the interpretation to differ between items of compensation.
Of course, these amounts are extended if the carrier cannot prove the injury was not due to his or his employees’ negligence – or the negligence of a third party such as a workshop AMO etc.
What it boils down to is that the claimant has to prove his loss; he isn’t just going to get a million rand unless a court says he is worth it, nor will his delay payment be a flat R47 000. He would have to prove his costs.
And don’t forget that if you fly into the EU you have to comply with the Brussels Sprouts lunacy. Any aircraft over 6 000kg MTOW and under 12 000kg has to insure for a Combined Single Limit of at least SDR20.5m (about R231m).
A Gulfstream GIV with 10 seats would have to insure for the equivalent of R1 720m.
It sort of makes the eyes water.
One other thing: you cannot try to reduce the Convention figures in the small print or on your tickets. It isn’t allowed. This is all for International flights for reward, while domestic regulations are entirely different.
Talking (oh all right! – writing) about tickets makes me recall that RSA Domestic regulations require airlines to put their operating licence numbers on the ticket. Now they will have to redo these tickets anyway to add the reference to the Montreal Convention. For example, using a sticker there could be a note that “reference to Warsaw also includes Montreal 1999 Convention and any similar legislation”.
Remember that very few countries have ratified M99 – in Africa only 12 out of the 25 that signed it have, while a further 31 haven’t even signed it.
I expect some legal chap will take issue with this view, but I can only read the M99 Convention this way.
Have you looked at your insurance yet?
And while on my favourite topic of the Brussels Sprouts, it seems that their ombudsman has told them to clear up their misleading language about delay. The pamphlets and other junk that flooded the market insinuated that you could get boodle from an airline for any delay. Not so. By Henry Tours

Copyright © Insurance Times and Investments® Vol:20.6 1st July, 2007
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