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Following is a question by the Hon Ambrose Cheung and a written reply by the Secretary for Economic Services, Mr Stephen Ip, in the Legislative Council today (Wednesday) :

Question:

Cathay Pacific Airways has recently cancelled quite a number of flights, disrupting the itineraries of travellers booked on the affected flights, and affecting the departure of quite a number of out-bound tours. In this connection, will the Government inform this Council:

(a) whether the existing mechanism enables members of the public to lodge claims for compensation in respect of delayed or cancelled flights; if so, the details of the compensation; if not, the reasons for that;

(b) of the measures in place to exempt travel agents from the responsibility of compensating their customers for any loss due to the delay or cancellation of flights; and

(c) how it regulates the relevant airlines in offering compensation to the affected passengers and travel agents?

Reply:

Madam President,

We have consulted the Department of Justice, the Trade and Industry Bureau and the Civil Aviation Department. Our replies to the three parts of the question are as follows:-

(a) An airline's liability towards passengers of air carriage to and from Hong Kong depends on the circumstances of the specific case, including the contractual relationship between the airline and the passengers. In general, such liability is governed by the Carriage By Air Ordinance (Cap 500). The relevant provisions of the Ordinance were made mainly by reference to the Warsaw Convention (1929) and the Warsaw Convention as amended by the Hague Protocol (1955) (known as the "amended Convention" in Cap 500).

Under the Ordinance, an airline is liable for damage occasioned by delay in the carriage by air of passengers. The upper limits for compensation are set out in the table below:

Upper Limits for Compensation(1)

International Carriage by Air

Warsaw Convention 125,000 francs(2) Around HK$86,000

The Amended Convention 250,000 francs(2) Around HK$172,000

Non-International Carriage 100,000 special Around HK$1.04 million

By Air drawing rights(3)

(1) When the airline concerned voluntarily offers a higher compensation, such upper limits do not apply.

(2) The term "francs" mentioned in the Warsaw Convention and the amended Convention refers to a currency unit consisting of 65-1/2 milligrams of gold of millesimal fineness 900.

(3) "Special drawing rights" means units of account comprising a number of national currencies used by the International Monetary Fund.

The passengers concerned are required to prove their damages. As to which of the three upper limits for compensation is applicable, it will depend on whether the countries in which the places of departure or destination of individual passengers are situated are State Parties to the Conventions. As at June 30, 1998, there were respectively 144 and 125 State Parties to the Warsaw Convention and the Hague Protocol.

Moreover, the airline concerned is not liable if it proves that it and its servants or agents have taken all necessary measures to avoid the damage or that it was impossible for it or them to take such measures. Furthermore, if the airline proves that the damage was caused by or contributed to by the negligence of the passengers, the court may exonerate the airline wholly or partly from its liability.

The various provisions of the Carriage by Air Ordinance may not apply in certain cases. For example, when there is non-performance of the contract with the passengers. For these cases, the concerned matters may be dealt with in accordance with contract law, taking into account the circumstances of the specific case.

(b) Whether travel agents are liable for compensating passengers for any damages due to the delay or cancellation of flights will generally depend on the terms of the contract concerned. At present, there are no statutory provisions in this regard. The disputes between a travel agent and the passengers are private disputes in nature, which may be resolved through civil proceedings.

(c) For passengers who suffer damages as a result of delayed or cancelled flights, the relevant requirements concerning claim for compensation are already outlined in part (a) above. As to whether the airline is liable for compensating the travel agents affected, it will generally depend on the terms of contract concerned. At present, there are no statutory provisions in this regard.

End/Wednesday, June 16, 1999

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