Lao-Viet Insurance Company on Friday gave US$4 million (S$5 million) to Lao Airlines as compensation after an ATR 72-600 belonging to the airline crashed into the Mekong on October 16 near Pakse International Airport.
This was the first payment made with respect to the loss of the aircraft and more will be made at a later date, though the total amount is not yet known.
LVI Director General Pham Duc Hau handed over the US$4 million to Lao Airlines President Somphone Duangdara. He promised that LVI, which is an associate of the London-based insurance company Willis, will award compensation in line with international standards.
He said LVI, a subsidiary of the Banque pour le Commerce Exterieur Lao, a leading Lao bank, will pay full compensation in accordance with the insurance policy signed with Lao Airlines.
But Hau was unable to give details of the extra compensation for the 49 people who lost their lives in the crash. An initial US$5,000 was awarded to the families of each of the victims to cover funeral expenses.
"We are unable to give any details at this point in time. The process involves international and Lao procedures," Hau said through an interpreter.
He said LVI would need to work with lawyers on the matter and it could take up to a year to complete the proceedings.
But he promised that the process would be finalised satisfactorily. "I am committed to ensuring that compensation for all the victims is paid out in line with Lao and international insurance laws," Hau told reporters.
Although officials declined to put a precise figure on the amount of compensation to be paid for each victim, Lao Airlines Vice President Somsamay Visounnalath said the insurance payout for an accident involving this type of aircraft and associated persons including passengers was typically not less than US$100 million.
Somsamay said compensation awarded under the insurance policy would not be affected by information revealed by the plane's flight data recoders, known as black boxes.
Lao Airlines has warned families of the victims to beware of fraudulent brokers, after learning that some lawyers had approached families and offered to prepare a case to sue for compensation.
The airline said insurance regulations guaranteed compensation but, if the families of the victims were not satisfied with the amount paid, they could then sue for more.