Families of Ethiopia plane crash victims could get Sh300m

Rescuers work at the scene of an Ethiopian Airlines flight crash near Bishoftu, or Debre Zeit, south of Addis Ababa, Ethiopia, on March 11, 2019. [Photo, AP]

A plane crash such as that of the Ethiopian Airlines jet that killed all the 157 passengers on board can be devastating.

Besides smashing shared dreams into smithereens, plane crashes have been known to gut through household’s finances, firm’s profitability and the country’s economic output.

But will compensation to families - which experts have projected to run into hundreds of millions - restore their hopes prior to the March 10 tragedy that saw at least 32 Kenyans killed?

There is the irreparable loss of loved ones, the sudden end of that re-assuring embrace in the morning; the realisation that they will not be around to wink at the little one crawling, giving it the courage to make the first leap on its feet.   

For the bereaved, the plane crash burrowed a deeper hole into their hearts. It is these broken hearts that they will rely upon to pump the vitality of life into every one of their organs for the rest of their lives.

But there could also be the loss of money - and that too can be heart-wrenching. Because, such accidents steal away the breadwinners - paper chasers who fly from city to hamlets looking for better deals. It snatches critical risk-takers from economies.

Like the young man who, throwing caution to the wind, gathers all his life savings and hops into the next available cheap flight to Addis Ababa, Ethiopia, en route Beijing, China.

For hours, he endures the blistering cold at the Bole International Airport waiting for the connecting flight to China.

He’d been told that China is the factory of the World, his surest bet to the pinnacle of entrepreneurship.

But the dream-encapsulated in some manufactured goods nicely wrapped in the cargo hold of the plane- dies with him on his return trip, leaving behind a young family with less to get by.

And less money means less bread on the dining table, and less bread means fewer smiles. Less money might mean little or no vacation for the family.

And less fun. It might mean the loss of medical insurance for those new to this world, with lungs too delicate that every gasp of the air is acerbic.

Loss of money means less happiness. The Grim Reaper can be merciless, squeezing the last penny from the bereaved that have to book flights to the scene of the accident. Everything, including their businesses, comes to a stand-still as they seek closure for the loss of their loved ones in a foreign land.

It might take long - or forever- to replace some of the lost heads or hands at a workplace.  Plane crashes diminish productivity. They rob firms of their best resources- the human resource.

At Tamarind Group, whose CEO Jonathan Seex was among those who perished in the ill-fated Nairobi-bound Boeing 737 MAX 8, there is a leadership vacuum that might be hard to fill. Tamarind Group owns and operates several restaurants and leisure operations in Africa.

Senior managers

Readers of Standard Group’s Pulse Magazine will certainly miss Tony Ngare’s column. Ngare was part of the 19 UN staff that perished in the crash.

The Kenya Airports Authority also lost two senior managers in the fatal crash – Brig (Rtd) George Kabugi and Juliet Otieno.  Kenyatta University is mourning the loss of two lecturers, while the Catholic Church lost Fr George Kageche.

US-based General Electric Africa President Farid Fezoua in a statement said two of GE Healthcare employees, Cosmas Kipngetich and George Kabau were among those who perished.

“I would like to express my sincere sympathy to the families and friends of our dear colleagues who lost their lives today as well as all the families of the other victims.

Other than firms losing their humans resources, they are also losing money.

After spending hours and billions to research and design Boeing 737 Max 8, the American plane-makers shareholders are left holding on to worthless share certificates.

An invention that was supposed to shore up Boeing’s share price by reducing spending on fuel, is now the source of shareholder’s predicament after another 737 Max 8 belonging to Lion Air crashed killing 189 people.

Boeing shares fell 5.6 per cent Monday last week before they rebounded by Friday after news that US aviation regulator - Federal Aviation Administration (FAA) - approved the plane maker’s plan to roll out a software upgrade for the model.

FAA had joined global aviation regulators in grounding all the 737 Max flights citing links between the Ethiopian and Indonesian crashes. About 344 Boeing 737 Max 8 have been grounded so far, with Kenya Airways mulling cancelling purchases of the model worth about Sh5.7 trillion.

Ethiopian Airline also grounded the new models, a move that analysts say is likely to affect the operations of what has so far been Africa’s well-managed airline. 

The grounding of these flights will most likely affect international trade as the movement of goods and people is curtailed.  

Money, they say, is not everything.

But perhaps it is the only thing that remains as families and friends of the victim plan to rise from the ruins of the latest disaster. Kenya’s Insurance Regulatory Authority (IRA) said that although the compensation will be handled by the Ethiopian authorities, they hope everything will go well.

“We trust that the claims will be lodged and settled as per standard practice,” said the head of corporate communications at IRA Noella Mutanda. 

Compensation of the families of the 157 victims might come from either Boeing Company’s insurers. While insurance payments will be made by Ethiopian Airlines’ insurers, the latter may want to recoup their money from Boeing’s insurers should they prove that the aircraft was faulty, a source told news agency Reuters.

If the new model aircraft is found to have been faulty, lawsuits might be brought against Chicago-based planemaker in the US where legal compensation payments for the crash victims could run from Sh200 million to Sh300 million per person, according to Reuters.

This is massive compared to about Sh20 million the victims will receive in Ethiopia, according to reports.

Chubb, the global provider of insurance products covering property and casualty, was the lead underwriter on the account for the Ethiopian Airlines jet that crashed on 10 March.

Willis Towers Watson acted as the insurance broker.

Insurers typically form a consortium to share the risks of large claims, with the lead insurer, Chubb in the present case, taking a larger proportion of the risk.

The insured value of the plane itself was likely between Sh5 billion and Sh6 billion, according to industry sources.