Families of the victims of the Yeti Airlines disaster will miss out on millions in compensation because a lethargic government has not passed the air carriers' liability and insurance draft bill.

Flight 961 crashed just before landing at Pokhara International Airport on Sunday, killing all 72 on board the ATR turbo-prop aircraft.

In 2020, Nepal finalised a draft bill on a separate system of liability for domestic flyers, two years after adopting the Montreal Convention 1999 that makes airlines liable in case of death or injury to passengers.

The long-delayed air carriers' liability and insurance draft bill has proposed a five-fold increase in compensation for death or injury. As per the planned law, domestic airlines have to pay a minimum compensation of $100,000 for injury or death of a passenger.

Currently, the minimum compensation for airline passenger death on a domestic flight is $20,000.

The draft bill says that the carrier should make an advance payment where it determines it is necessary to meet the immediate economic needs of, and hardships suffered by, a passenger or the families of the victims.

A compensation claim should be filed within 60 days of the incident or accident at the airline or its agents, according to the proposed law.

According to the draft bill, the carrier’s liability limitation for cargo lost, damaged or delayed shall be $20 per kg. Under the Montreal Convention 1999, a carrier's liability limitation for cargo lost, damaged or delayed shall be $26.63 per kg.

Tourism Ministry officials say the proposed legislation is a modified version of the Montreal Convention 1999 because there are a number of clauses that domestic airlines would not be able to comply with.

The draft bill for air carriers' liability and insurance has not taken into consideration liability for flight delays, including unlimited claims.

The Montreal Convention 1999 came into force in Nepal on December 15, 2018.

“The draft bill is ready and we have planned to table it at the Cabinet,” said Buddhi Sagar Lamichhane, joint-secretary at the Civil Aviation Ministry. “After the Cabinet gives the go-ahead, the bill will be tabled in Parliament.”

According to ministry officials, frequent changes of ministers have resulted in the very slow progress of the bill.

The Culture, Tourism and Civil Aviation Ministry holds the record for the fastest entrances and exits of ministers—seven in three years. They are Yogesh Bhattarai (July 2019 to December 2020), Bhanu Bhakta Dhakal (December 2020 to June 2021), Uma Shankar Aragriya (June 4 to 22, 2021), Lila Nath Shrestha (June 24 to July 12, 2021), Prem Ale (October 2021 to June 2022) and Jeevan Ram Shrestha (June 2022 to January 2023).

On Tuesday, Prime Minister Pushpa Kamal Dahal appointed Sudan Kiranti as the new tourism minister.

“Some ministers lasted a long time, but they were not bothered about the bill,” the officials added.

Lamichhane said they were unable to table the bill because Parliament was prorogued several times.

The Yeti Airlines plane was insured with Himalayan Everest Insurance Company, which said families of the victims may not have to wait long to receive compensation.

Niraj Pradhan, senior manager at the underwriting department of Himalayan Everest Insurance Company, said independent surveyors sent by the reinsurance company abroad have already started work to assess the damage.

“It may not take much time for family members to receive their money, but it takes a long time to settle the claims of the aircraft,” Pradhan said. “We settled the claims arising from the Tara Air crash last May within three months.”

As the compensation amount to be paid by the insurance company has been fixed in case of death, there are no disputes, according to the company.

Sudarsan Bartaula, spokesperson for Yeti Airlines, said he expected payments to begin within a month after post-mortem reports.

"As of Thursday, 47 of the 71 bodies recovered had been identified," he said.

The families received 22 bodies in Pokhara, and 49 bodies were airlifted to Kathmandu. According to Bartaula, eight bodies have been handed over to the families in Kathmandu.

Yograj Kadel, spokesperson for the Airline Operators’ Association of Nepal, said that it takes at least 21 days for claims payment after the death certificate and certificate of family relationship are produced.

The Yeti Airlines tragedy in Pokhara on Sunday is the 104th crash in Nepal and the third biggest in terms of casualties.

According to Nepal’s civil aviation body, 914 people have died in air crashes in the country since the first disaster was recorded in August 1955.

The biggest air accident occurred on September 28, 1992 when an Airbus A310 belonging to Pakistan International Airlines slammed into a hillside at Bhattedanda near Kathmandu Valley, killing 167 people on board.

Earlier, on July 31, 1992, an Airbus A310 of Thai Airways crashed in Ghyangphedi, killing 113 on board.

Nepali domestic carriers fly more than 4 million passengers annually.