Air Bagan settles crash as U Tay Za mulls its future

Air Bagan settles crash as U Tay Za mulls its future

By Jeremy Mullins and Ei Thant Sin   |   Saturday, 09 August 2014

Air Bagan has settled with two American citizens injured in the 2012 crash at Heho airport, in what the Americans’ legal counsel claims may be the largest settlement ever in Myanmar.

The wreckage of Air Bagan flight 11 as seen in December 2012. Photo: AFP

The settlement comes as Air Bagan chair U Tay Za has publically expressed doubts on the future of Air Bagan, claiming the airline has lost US$90 million over the past few years and is having difficulty sourcing spare parts due to sanctions, according to a recent Forbes magazine interview.

American citizens Susanna Weiss and Allan Lokos were injured in the 25 December 2012 crash at Heho airport near Inle Lake in Shan State. The accident occurred when Air Bagan Flight 11 attempted to land at 8:51am on Christmas Day 2012, after taking off from Mandalay airport. One Myanmar passenger – the tour guide of Ms Weiss and Mr Lokos – and a Myanmar person on the ground were killed.

While Eric Rose, partner at Herzfeld Rubin Meyer and Rose law firm and lawyer for the two Americans declined to reveal the size of the settlement, he said it is large by international standards, and as far as his research showed the largest in Myanmar.

“Yes these Americans were adequately compensated but there were so many more people on that plane who have not been,” he said.

Mr Rose said that Mr Lokos in sustained burns on 30 percent of his body in the crash, while Ms Weiss suffered a number of injuries herself when the plane landed short of the runway in heavy fog, got entangled in telephone and electric wires and then burst into flames.

After the accident the two Americans were transferred to Taunggyi, the nearest hospital, but it was not properly equipped to deal with burns. U Tay Za then transported the two to Bangkok on his personal helicopter, where Mr Lokos was stabilised, before organising to send them to Singapore. They subsequently returned to the United States.

Mr Rose added that Mr Lokos credited U Tay Za with contributing to saving his life in the aftermath of the crash, but what happened afterwards was a “totally different story.”

U Tay Za received “very bad advice” from his insurance company’s lawyers who had an inherent conflict – by representing the insurance company rather than Air Bagan and U Tay Za – which they may not have disclosed to U Tay Za, said Mr Rose.

“The reason why we ended up in litigation and he ended up paying substantially more than he would have paid in a friendly settlement is because he just got bad advice,” he said.

Suits were filed in the United States, Thailand and Myanmar, though could also have been filed in Singapore but were not as it has a longer statute of limitations, he said. Mr Rose added the cases never went to trial as the two parties reached a settlement.

Although Air Bagan officials have acknowledged but not returned repeated requests for comment, U Tay Za took to Facebook earlier this year to defend Air Bagan’s role in the accident.

While the suit claimed that Air Bagan failed to train its pilots and attendants properly, U Tay Za said on his Facebook page that Air Bagan’s employees performed at an international standard, evacuating the passengers within 90 seconds. He added that he was personally involved in seeking proper care for the injured passengers.

U Tay Za added that the case may serve as a cautionary tale for local tourism firms doing business with Americans, as they received many times the compensation of Myanmar people injured in the crash.

Passenger Ko Mg Htay Aung suffered from severe burns and permanent scars “that are many times worse than that of Mr Allan Lokos, yet Mg Htay Aung received only US$10,000 compared to the many millions of dollars that the two Americans asked for,” he said in a Facebook post earlier this year. “I requested respective lawyers to help them out with this case.”

 “Moreover, for tour operators who are figuring out how much this can affect [them] within Myanmar, and hotel and tourism businesses to take my incident as an example of what America does to a Myanmar citizen, I inform you about this case with pictures for you to be your own judges,” he said in the post, which included pictures of Westerners being loaded onto a helicopter.

U Tay Za added that the family of the deceased should “receive what they deserve according to international standards.”

Mr Rose said that his firm was also willing to represent Myanmar passengers in the crash had it been approached to do so, adding it represented many Myanmar people pro bono.

Positive experiences with the legal system will engender public trust in the rule of law, though it will also require communicating successful experiences and increased transparency, he said.

 “The more transparency that exists the more trust the public will have in the legal system and therefore they will chose the legal system to try and resolve issues rather than doing it alone,” said Mr Rose.

U Tay Za also posted a letter written by Ms Weiss to President U Thein Sein on his Facebook page, where Ms Weiss said that medical bills were expected to exceed US$1 million, adding there were a number of costs ahead of them.

Meanwhile, U Tay Za has also publically considered the future of Air Bagan.

He may be forced to close the airline, which lost about $90 million over the past few years, in part because he is not allowed to buy American-made spare parts at market prices, he said, according to a July 23 Forbes report.

U Tay Za and Air Bagan are on the American Special Designated National list, which prevents US entities from doing business with him without specific American approval.

U Tay Za has also been linked to Asian Wings airline, though it is not on the SDN list and company officials have denied a link. A planned joint venture between Asian Wings and Japan’s ANA fell through on July 30.

Mr Rose said the fact that U Tay Za and Air Bagan are on the SDN list meant the two parties needed special permission from the US Treasury Department.

Air Bagan settles crash as U Tay Za mulls its future