Compensation for Delays & Accidents

Last updated: August 11, 2011

The National Air Carrier Association says ‘no way’ to paying compensation to passengers for delays but ups accident payments.

The Ministry of Transport is currently drafting a memorandum on the responsibilities airlines owe to passengers affected by delays, and there are indications that monetary compensation is to be mandated, likely 200,000 rupiah for two hours.

The Indonesia National Air Carrier Association (INACA) has rejected these proposals, with INACA secretary general Tengku Burhanuddin saying:

If the Ministry includes monetary compensation then we don’t agree, the current regulations on the matter are sufficient.

The current regulation, KM 25/2008, states that airlines can provide non-monetary compensation, such as free snacks while passengers sit out delays of over one hour. For cancellations passengers are to be transferred to other flights or put up in hotels.

The precise details of such compensation vary from airline to airline, and depend to a large extent on whether the carrier is low cost or full service.

Accident Compensation

However although they are tight fisted in the delays compensation area, INACA has recommended to its members that they increase compensation paid due to injury or death from plane accidents.

Tengku Burhanuddin said increases in accident compensation rates had not occurred in a long time and were thus overdue, and needed to be brought into line with international standards, which he said were $100,000 per person.

In rupiah that’s 1 billion for death, and 1.2 billion for total and permanent incapacitation.

He warned airlines not to increase the insurance premiums that passengers paid in order to cover these extra compensation costs.

2 Comments on “Compensation for Delays & Accidents”

  1. Chris says:

    I have a photo I took at Surabaya Juanda’s airport of a sign describing the legally mandated compensation for flight delays and cancellations, effective since 2008. As I can’t upload it here and it’s in Indonesian, here is a summary:

    30-90 minutes: Airlines must give drinks and light snacks

    90-180 minutes: Airlines must give drinks, light snacks, lunch, dinner and move the passenger to the next flight or a flight on another airline, whatever the passenger requests.

    > 180 minutes: As above, plus accommodation for the night and a flight the next day, if necessary.

    Cancellation: Airlines must move the passenger to the next flight or a flight on another airline, whatever the passenger requests.

    And if the passenger wishes to not travel after a delay of more than 180 minutes or cancellation, the airlines must give them a full refund.

    However, some airlines are clever and “re-time” the departure at short notice to avoid their legal obligations.

  2. Chris says:

    An update on the topic from today’s Jakarta Post:

    Ministry will wait on flight delay payment rule

    The Transportation Ministry says it will delay implementing a regulation that would require airlines to compensate passengers for flight delays longer than four hours.

    The ministry regulation, No. 77/2011 on airline responsibility, would not go into effect until Jan. 1, 2012 because many airlines were not ready, the ministry’s air transportation directorate general spokesman Israful Hayat said on Monday.

    “Based on circulation of this regulation after it’s issuance, as well as from input from stakeholders and evaluation by the ministry, we have decided to postpone implementation until the airlines are ready,” he said.

    The new regulation was previously scheduled to go into effect on Nov. 8, three months after it was issued on Aug. 8.

    Under the regulation, air carriers, charter plane operators and contracted carriers would have to immediately pay each passenger 300,000 (US$35.10) for flight delays longer than four hours.

    Airlines will be required to pay passengers Rp 150,000 if they reroute flights to other destinations and be required to give passengers airline tickets or make other arrangements to get the passengers to their original destinations.

    The regulation also requires that airlines announce flight cancelations seven days in advance and offer passengers full refunds. If a flight is canceled within seven days of departure, an airline will have to compensate passengers as per the stipulations for flight rerouting.

    However, airlines will not be required to pay compensation if the delay is due to bad weather or operational and technical problems such as refuelling delays or a damaged runway.

    “A delay in implementation is also needed because there is no insurance consortium that agreed to cooperate in guaranteeing the responsibility of air carriers to the customers,” Israful said.

    “The regulation aims to protect customers and to make the airlines more disciplined to promote safety and the smooth running of the airline business,” he said. (nfo)

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