Fallout From Flight 11

By Simon Lewis 15 December 2014

YANGON — When Air Bagan Flight 11 took off on Christmas morning in 2012, Allan Lokos had no qualms about flying with the local airline.

“There may have been a few clouds in the sky but certainly it was pretty much an ideal day for flying,” Mr. Lokos recalled by phone from his home in New York City.

The 100-seat Fokker 100 aircraft was bound from Mandalay to Heho, Shan State, and was carrying more than 60 passengers.

On the approach to the airport that serves tourists traveling to Inle Lake, the plane hit electrical cables and crashed to the ground, in what was later judged by Myanmar investigators to be pilot error.

Ma Nwe Lin Shein, a tour guide for Mr. Lokos and his wife, was killed in the crash. A local motorcyclist, U Pyar, also died after the plane careened into him.

The injured included Mr. Lokos and his wife Susanna Weiss, five Myanmar tour guides, the passenger of the motorbike driven by U Pyar, and two Australians.

The crash revived questions about the safety of flying in Myanmar, but it also highlighted how the lingering effects of the country’s isolation meant that those flying with local airlines did not have the same protections they would receive elsewhere.


As he escaped the smoking wreckage, Mr. Lokos suffered serious burns to about a third of his body and was in a critical condition.

Air Bagan founder U Tay Za quickly stepped in to help, flying Mr. Lokos to Bangkok and then to Singapore and assisting with significant immediate hospital and transport costs before Mr. Lokos and Ms. Weiss arrived back in the United States.

Later, relations stalled and the American couple filed a lawsuit in San Francisco against the airline and the Htoo Group, of which U Tay Za is chairman. The legal wrangling ended last May after a hefty settlement was agreed.

The scale of the payout to Mr. Lokos and Ms. Weiss has not been disclosed, although Mr. Lokos’ medical bills alone were more than US$1 million. Myanmar media has reported that the lawsuit was for $10 million.

Others who were injured have not yet secured full compensation, while relatively small payouts have been reported to the families of the deceased Myanmar citizens.

As well as payments of unspecified amounts that were made by the airline to some victims shortly after the crash, in August last year the Htoo Foundation announced on its website that it had donated 50 lakhs (US$5,000) to the family of the deceased U Pyar and 2 lakhs ($2,000) each to his four siblings. A total of $5,000 was donated to U Pyar’s nephew and burn victim, Ko Htay Aung.

In March this year, U Tay Za said on his Facebook account that Singapore re-insurers had offered $10,000 to a local burn victim who was not named.

Two injured Myanmar tour guides who admitted to understanding little about the insurance business say they have not yet received insurance payouts they had heard would be forthcoming.

Ma Toe Toe Khin from Taunggyi, who experienced burns to around 10 percent of her leg area and a spinal fracture, said the airline has paid all her medical bills as well as a one-off payment of 20 million kyats (approximately $20,000) soon after the incident.

She said that around six months ago she and another injured female guide, who is also still out of work, received phone calls from the airline saying that insurance payouts would be forthcoming, but they have not heard anything since.

Tour guide Ko Myint Htwe, who has returned to work after suffering minor head injuries in the accident, reported that he had received a similar call.

All the guides stressed that they cast no blame for the accident and expressed gratitude to the airline for the help they had so far received.

Two Australians were also injured but have not received compensation, according to Joseph Wheeler, senior solicitor at Shine Lawyers in Brisbane, Australia, who is representing them.

The two did not initially seek legal assistance in the hope that the airline and its insurers would pay them compensation in good faith, he said. When help was not forthcoming they sought advice, but only after a one-year statute of limitations in Myanmar had expired.

Mr. Wheeler said by email that his clients were “still strongly affected by the horrors they experienced on the date of the accident,” but would not give details of the injuries they sustained.

The legal options remaining for his clients are now “limited to nil,” he said. “Principally we will be pressing the airline’s insurer to make an ex gratia [voluntary] payment to our clients that is reflective of their losses.”

More Hurdles

Other issues have contributed to the complexity of the settlements process.

U Tay Za’s listing on the US Treasury Department’s Specially Designated Nationals (SDN) “blacklist” was a barrier to negotiations for Mr. Lokos and Ms. Weiss—the Americans had to obtain special permission from the Treasury just to negotiate with Air Bagan.

In Australia, Mr. Wheeler said his clients’ problems are linked to the fact that the Myanmar government hasn’t signed up to international aviation conventions.

Myanmar is not party to the 1999 Montreal Convention, which ensures that passengers involved in air crashes receive compensation without having to prove willful neglect by the airline.

Under the convention, which is widely in force internationally, victims are entitled to compensation arising from physical injuries, pain and suffering, lost wages, medical bills, damaged luggage and other economic losses.

They are also entitled to compensation for emotional distress, if this is accompanied by physical injury.

“The fact that the government has not signed these most consumer friendly and passenger friendly treaties betrays the fact that it is well behind the rest of the world in using the key legal tools available to make the skies safer for its citizens and travelers alike,” Mr. Wheeler told The Irrawaddy.

“The fact that the liability treaties have not been ratified also indicates to me that other aspects of air safety regulation internationally are likely not well understood or implemented in the country.”

Eric Rose, a partner at Herzfeld Rubin Meyer & Rose, which represented Mr. Lokos and Ms. Weiss, concurred that the crash had exposed failings in the way Myanmar interacts internationally.

“Right now, Myanmar is reentering the world community, which already has international rules having to do with airline safety, with compensation for injuries suffered by airline passengers on foreign carriers,” Mr. Rose said.

“It raises serious questions to be asked as to whether all passengers on an airline in Myanmar should be treated equally, irrespective of whether they are American or Myanmar or Australian or any nationality.”

Safety Concerns

Although there has not been a fatal air accident since the Air Bagan crash, the safety record of domestic Myanmar airlines is less than impressive.

According to the Flight Safety Foundation, 100 people have been killed in aviation accidents in Myanmar since 1988, and non-lethal incidents, like planes overshooting an airstrip, are relatively frequent.

Anthony Philbin, communications chief at the International Civil Aviation Organization, said that since the Montreal Convention is not signed by Myanmar, national law applies in air crash legal cases.

He insisted, “Aviation is the safest form of transport. Conventions pertaining to accidents and victims in no way impacts the technical, operational and other provisions which are in place to mitigate risks and keep passengers and crews safe.”

Air Bagan did not respond to a request for comment on this story.

Additional reporting by Zarni Mann.

This article first appeared in the December 2014 issue of The Irrawaddy magazine.