Who Pays When You Lose An Airliner?

The disappearance of Malaysia Flight 370 has consumed our news and minds. How could a plane carrying 239 people just vanish? Was it an accident? Was it intentional? Who could do such a thing? There are so many unanswered questions, lots of theories, but no answers. One of the questions that I wondered was…

Who is going to pay for all this?

I know that might sound superficial, but I do feel that it is a totally reasonable question considering the magnitude of the situation.


Based on the fact that the flight has been missing for over two weeks, Malaysian Airlines has stated - “none of the passengers and crew on board survived”. With this information, the airline has offered families and initial payment of $5000 per passenger. There will probably be more to come, considering this was just an initial payment to help with travel and lodging expenses.


There will then be insurance claims and lawsuits that will be handled separately. Those figures will be based on individual factors, such as earning potential of the deceased individual and if they had a family that needs to be taken care of. Each sum could vary from $400,000 to $10 million.


Since Malaysia Airlines has declared the flight to be lost with no survivors, families will be able to start collecting on any life insurance policies and/or any flight insurance that may have been purchased.


International law requires airlines to carry large insurance policies that cover the passengers and plane in nearly every situation. Nuclear detonations are really the only exception. The airline will receive the money directly.


While some of the payments have already been made, some of the lawsuits could take years to settle. Even without the finding of the still missing plane. Even if the plane is found it will more than likely have no effect on the lawsuits themselves.


Just recently, satellite images have shown an object in the Indian Ocean, just west of Australia, with the same dimensions as the missing plane. Authorities strongly believe that could quite possibly be Malaysia Airlines Flight 370. Even with these new findings, there are still questions and even some conspiracy theories. There are however, some facts:

Here is what we DO know…

  • 12:41am (00:41) Malaysia Flight 370 left Kuala Lumpur en route to Beijing, China with 239 people aboard. 
  • 01:01 Crew confirms altitude of 35,000 feet 
  • 01:06 last ACARS (Aircraft Communication Addressing and Reporting System) data transmission received; Crew confirms altitude of 35,000 feet, a second time. 
  • 01:19 Last Malaysian voice contact with Air Traffic control (ATC) “Alright, Good night” 
  • 01:22 Transponder and ADS-B (Automatic Dependent Surveillance-Broadcast) now off, which could only be done manually. 
  • 01:30 Voice contact attempted by another aircraft, at the request of Vietnam ATC. Only mumbling and radio static audible in response. 
  • 01:37 Missed expected half-hourly ACARS data transmission. 
  • 02:11 First of seven automated hourly 'handshakes' (since last ACARS transmission) via a satellite. 
  • 06:30 Missed scheduled arrival at Beijing International Airport. 
  • 07:24 Malaysia Airlines pronounces flight missing in statement released to media.
  • 08:11 Last successful hourly “handshake” with satellite • 08:30 Media reports on missing flight 

Handshaking is a technique of communication between two electronic entities. A simple handshaking protocol might only involve the receiver sending a message meaning "I received your last message and I am ready for you to send me another one."