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LCQ16: Payment period for purchase of air tickets by travel agents

     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 (April 6):


     A great majority of the airlines operating in Hong Kong are members of the International Air Transport Association ("the Association").  Earlier, the Association has unilaterally notified all registered travel agents in Hong Kong that the payment period for the Billing and Settlement Plan in respect of the purchase of air tickets (i.e., the period within which travel agents are required to effect payment to airlines after purchase of air tickets) will be shortened from the original 15 days to seven days.  Some members of the trade have pointed out that such an arrangement has seriously impacted the cash flow of travel agents, and some of them may possibly be closed down as a result.  In this connection, will the Government inform this Council:

(a) as some members of the trade have pointed out that given the enactment of anti-trust laws by a number of countries, airlines generally avoid, as far as possible, entering into any negotiation or agreement in respect of their operation mode, yet they often manipulate the operation mode of the market and implement measures for such purpose through the Association, whether the authorities have assessed if the act concerned is anti-competitive conduct which is proposed to be regulated under the Competition Bill; whether the Government can undertake that, after the passage of the Bill, it will examine immediately if the relevant arrangement between the Association and the airlines concerned have violated the principle of fair competition; and

(b) whether the Government has, before the Competition Ordinance comes into operation, any other policies or means to monitor if the airlines have acted in collusion to manipulate the market, so as to uphold the principle of fair competition?


(a) We have consulted the Commerce and Economic Development Bureau.  Whether the concerned act of the International Air Transport Association ("IATA") constitutes a breach of the provisions under the Competition Bill needs to be investigated by the future independent Competition Commission and adjudicated by the Competition Tribunal before a breach can be established.  Any person may lodge a complaint with the Competition Commission which could conduct an investigation if it has reasonable cause to suspect that a contravention of a competition rule has taken place; and

(b) We understand from IATA that the shortening of the payment period referred to in the question has yet to be implemented.  IATA is consulting the local travel agents and travel agents may lodge their views during the process.  Before the enactment of the Competition Bill, an aggrieved party may lodge a competition-related complaint to the Competition Policy Advisory Group ("COMPAG"), chaired by the Financial Secretary, which may refer the complaint to the concerned policy bureau / government department for investigation and consideration.

Ends/Wednesday, April 6, 2011
Issued at HKT 12:04


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