Air India Receives $125 Million For Hull And Engine Losses After Ahmedabad Crash

Last Updated:January 24, 2026, 10:21 IST

Air India received $125 million from global reinsurers and Indian insurers for hull and engine losses after the Ahmedabad crash, with $25 million paid to victims' families.

The London-bound aircraft crashed just 32 seconds after takeoff from the Ahmedabad airport. (PTI Photo)

Global reinsurers and Indian general insurance companies have paid $125 million to Air India to cover hull and engine losses following the recent air crash in Ahmedabad. The payout comes as part of the airline’s insurance claim, compensating for the damages sustained by the aircraft during the incident.

The settlement will help offset repair and replacement costs, ensuring minimal disruption to the airline’s operations.

They have also disbursed $25 million (Rs 225 crore) as compensation to the families of passengers who lost their lives in the crash. Insurance sources indicated that the compensation process is still ongoing and the total payout is expected to increase substantially once all claims are fully processed.

Earlier, Indian reinsurer GIC Re had estimated that Air India’s Ahmedabad crash claim could reach a total of $475 million (₹4,275 crore), including $350 million in liability claims to cover compensation for the 260 passengers who died in the accident.

The Ahmedabad-London Gatwick flight AI-171, operated by Air India using a Boeing 787 Dreamliner, crashed near Ahmedabad, killing 260 people, including 241 passengers. The aircraft was completely destroyed.

Of the 230 passengers on board, 169 were Indians, 53 British, seven Portuguese and one Canadian. The other 12 people on board were two pilots and 10 crew members. Only one passenger survived the crash.

The initial claim of $125 million covers $80 million for the aircraft hull and an additional $25 million for the two engines.

According to a reinsurer, who participated in the Air India deal, “The aircraft had just undergone an engine maintenance exercise and had a new engine for a temporary period while the old engine was getting serviced. That old engine will now be the property of reinsurers who had insured Air India and they can recover some money by selling that engine.’ All the claims for the hull and engines have been settled. Only passengers’ claims are pending."

Air India’s total claim from the Ahmedabad crash ranks among the largest in aviation insurance history. Since April 1, the airline has held a renewed $20 billion hull insurance policy and a $1.5 billion liability policy, with multinational AIG serving as the lead reinsurer.

Nearly 95 percent of Air India’s insurance policy has been reinsured by a group of reinsurers led by AIG, Axa, and Allianz.

Among the primary insurers, Tata’s general insurance arm, Tata AIG General Insurance, held the largest share with over 40 percent of the policy, followed by state-owned New India Assurance and other public and private sector general insurers.

According to industry experts, both the airline and the families of those who died in an air crash are generally entitled to compensation, even when pilot error is involved.

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