As the cornerstone of international air carrier liability rules, the 1999 Montreal Convention has created a ‘channelled’ liability system to promote adequate and rapid compensation. This article first explores the origin of ‘channelling’ liability under the Montreal Convention, then examines two possible scenarios arising from ‘channelling’ of liability; finally analyses the legal effect of ‘channelled’ liability in light of the Convention’s purposes, while noting difficulties faced by carriers because of third-party indemnity claims.