Limits on air carrier liability for international accidents has been with us since the adoption of the Warsaw Convention in 1929.  One of the flaws in the original Warsaw Convention of 1929 was that there was no regular mechanism to adjust the liability limits.  Instead, liability limits had to be revised  through the time consuming process of formally adopting additional protocols, such as the Hague Protocol of 1955.

For most countries, the Warsaw Convention has been superseded by the Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal on May 28, 1999, otherwise known as the Montreal Convention.  The Montreal Convention solved the inflation issue by allowing the liability limits to be adjusted every 5 years.  In 2009, the liability limits were increased by approximately 13 percent.  At the next review in 2014, it was determined that there had not been sufficient inflation to warrant any changes to the liability limits.

The liability limits were reviewed again in 2019, and it was determined that the limits should once again be increased by approximately 13 percent.  Accordingly, the new liability limits for international air accidents under the Montreal Convention are as follows:

For many people looking at this chart, the first question is, what is an SDR?  An SDR is a Special Drawing Right for a type of reserve currency created by the International Monetary Fund in 1969.  It is not a currency in its own right, and its value changes based on the values of five different national currencies –  the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.  As of the writing of this article, one SDR is worth $1.38, placing the liability limits at:

It should be noted that, while the increases in the liability limits go into effect automatically, air carriers must still take action as a result of the change.  All carriers, including indirect air carriers, must revise their contracts of carriage, tariffs, and required notices to include the new limits.  The Department of Transportation has held that any failure to make the changes would “constitute an unfair or deceptive practice and unfair method of competition in violation of 49 U.S.C. 41712.”

So, now is a good time to double check your disclosures and notices to ensure you are compliant.