KATHMANDU: Confusion has arisen regarding insurance payouts for unauthorized passengers who died in a flight meant only for pilots and airline technicians.
While claims can be made for pilots, technicians, and damage to the aircraft, the status of claims for unauthorized passengers remains unclear, according to sources.
The Saurya Airlines CRJ 200 aircraft that crashed at the Tribhuvan International Airport (TIA) in Kathmandu on Wednesday was on a ferry flight. According to the Civil Aviation Authority of Nepal (CAAN), airlines are not allowed to carry passengers other than pilots and necessary technicians on ferry flights.
Along with airline technician Manu Raj Sharma, his wife Prija Khatiwada and four-year-old son Adhiraj Sharma also died in the crash. Prija was working with the Ministry of Energy, Water Resources and Irrigation. While an insurance claim can be made for Manu Raj, claiming insurance for his wife and son may not be straightforward, CAAN officials say.
Gyanendra Bhul, the information officer of CAAN, said that a ferry flight is meant only for pilots and technicians. “No one except the pilot, co-pilot, and necessary technical staff should have been on that flight. The airline made a mistake by allowing other passengers in the ferry flight,” Bhul told Himal Press. “An investigation committee has been formed, it will shed light on this.”
Just as cargo planes cannot carry anything other than goods, ferry flights cannot carry passengers other than pilots and necessary technicians, Bhul explained. He added that the airline should also investigate why passengers other than pilots and technicians were on board the ferry flight.
The Saurya Airlines CRJ-200 aircraft, which took off from TIA for Pokhara, became uncontrolled and veered to the right just seconds after leaving the runway on Wednesday morning. Eighteen out of 19 people on board the aircraft, including the pilot and co-pilot, died. According to CAAN, pilot Manish Ratna Shakya has been rescued alive. Shakya is currently undergoing treatment at the Kathmandu Medical College (KMC) in Sinamangal. He is out of danger.
The aircraft was flying to Pokhara for a C-Check. As the hangar at TIA was not available, the airline had rented a hangar at Pokhara International Airport for one month.
Saurya Airlines, chaired by Deepak Pokharel, has been operational since August 2014.
What About Insurance?
Airlines are required to insure both aircraft and passengers according to standards set by the government. In case of accidents, airlines file claims with the relevant insurance companies based on the extent of damage.
Dinesh Lal Karna, a retired secretary of the Nepal Insurance Authority, said that airlines are required to have two types of insurance. “Airline companies need to have separate insurance for aircraft and passengers,” he said, “In case of accidents, they file claims with the respective insurance companies accordingly.”
Karna stated that in Saurya Airlines’ case, while claims can be made for pilots, technicians and damage to the aircraft, nothing can be said about the unauthorized passengers. “Passengers who shouldn’t have been on the flight have lost their lives. This is a very unusual situation,” he said, “It doesn’t seem likely that claims can be made in such circumstances. However, it ultimately depends on the airline’s policies.”
Pilots and technical staff on ferry flights are insured by the airlines. There is uncertainty about the insurance for family members of employees who died as passengers.
Bhul said that typically only pilots and technical staff on ferry flights are insured. “Employees on ferry flights are insured by the airlines, but I don’t think claims can be made for family members who were also on board,” he said. “We also need to look at the nature of policies the airline has purchased.”
Saurya Airlines had reportedly insured the aircraft with Prabhu Insurance. The airline has already notified its insurer about the accident.
According to regulations, passengers on domestic flights are insured for a minimum of $20,000.
Karna said that the insurance company should also cover the medical expenses of injured pilot Shakya. Similarly, the insurance company should cover the cost of damage to the aircraft and any third-party damage.
Prabhu Insurance has reportedly retained 0.3% of the risk for this insurance, while 99.7% of the risk has been reinsured with reinsurance companies.
A Bankrupt Company?
Saurya Chairperson Pokharel was a government employee in the early 1990s. Later, he entered the business of betel nuts. Thanks to his political connections, he expanded his business range from tea plantations to investments in hospitals.
Having gained experience in business, Pokharel’s interest turned towards airlines, leading to the opening of Saurya Airlines.
Pokharel, however, failed to run the company successfully. The airline remained grounded for nearly 10 months in 2020. In October of the same year, the airline announced that India’s Kuber Group had acquired 49% of stakes in the company. It is not clear whether the Indian group is still associated with the company.
In January 2022, Pokharel was embroiled in controversy when three people, including Saurya Airlines employee Resha Shakya, were arrested with Rs 5 million of undeclared source from the domestic terminal of TIA.
Pokharel claimed on the airline’s letterhead that Rs 5 million belonged to him and requested the release of the employee.
One of Saurya Airlines’ three aircraft was grounded. The two operational aircraft were flying to Bhadrapur and Biratnagar. One of these aircraft has now crashed. This loss-making company had recently even cut down on its staff.
