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Following is a question by the Hon Paul Tse Wai-chun and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, at the Legislative Council meeting today (June 2):
Question:
It has been reported that last month, the Federal Court of Australia ruled that fuel surcharges were to be included in the base figures for calculating the commissions payable to travel agencies by an airline. In this connection, will the Government inform this Council whether it will make reference to the case and conduct a study on requiring airlines to adopt the same principle in calculating the commissions payable to travel agents in Hong Kong; if it will, of the timetable of the study; if not, the reasons for that?
Reply:
President,
The Australian court judgment referred to in the question concerns a contractual dispute between an airline and a travel agent on the calculation of commission, and is not related to tariff applications under an air services agreement.
According to the bilateral air services agreements that Hong Kong has entered into with its aviation partners, the tariffs to be charged by the airlines for scheduled air services (including the fares charged for the carriage of passengers, the rates charged for the carriage of cargo, the charges and conditions for services ancillary to the carriage, and the rate of commission paid to an agent in respect of air tickets sold for carriage on scheduled air services) shall be those approved by the aeronautical authorities of both Contracting Parties and shall be established at reasonable levels, due regard being had to all relevant factors. Such requirements aim to prevent airlines of either Contracting Party from adopting such practices as dumping and discriminatory or predatory pricing, which distort normal market operations and affect air services, to the extent of adversely affecting the interests of passengers.
As the mechanism and remuneration arrangements concerning the sale of tickets are a commercial matter between the airlines and the travel agents, it should be determined by the airlines and the travel agents. Hence, the Civil Aviation Department will not require the airlines to pay commissions to the travel agents on the passenger fuel surcharges.
Ends/Wednesday, June 2, 2010
Issued at HKT 11:19
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