Major Speeches, Presentations and Press Releases



LCQ11: Incidents of airlines failing to provide seats for ticket-holding passengers to board flights

     Following is a question by the Dr Hon Chiang Lai-wan and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (June 21):

Question:

     It has been reported that in February this year, a consumer purchased from an airline's website a return air ticket and completed the payment procedure after seat reservation had been confirmed, but not until the check-in process did the consumer realise that the airline did not have her purchase and payment records, and she was denied boarding eventually. The Customs and Excise Department conducted an investigation upon receipt of a report from that person, and arrested on May 26 a general manager of the airline for the alleged offence of contravening the Trade Descriptions Ordinance (Cap. 362). On the other hand, airlines usually estimate the "no-show rate" of passengers and exercise discretion to oversell air tickets. In this connection, will the Government inform this Council:

(1) whether it knows, in each of the past three years, (i) the number of cases in which airlines failed, for various reasons, to provide seats for ticket-holding passengers to board flights (set out the relevant information by name of airline), (ii) the respective numbers of relevant complaints received by the government departments concerned and the Consumer Council and how they followed up such cases, and (iii) the number of cases in which airlines were prosecuted for contravening Cap. 362 as a result, and the penalties imposed on convicted airlines;

(2) whether it knows how airlines dealt in the past three years with incidents in which they had failed, for various reasons, to provide seats for ticket-holding passengers to board flights; if so, of the details of the relevant arrangements (including the arrangements for making compensation or refund to consumers); if not, the reasons for that; and

(3) given that section 13I (wrongly accepting payment) of Cap. 362 provides that a trader wrongly accepts payment for a product if the trader accepts payment or other consideration for the product and at the time of that acceptance there are no reasonable grounds for believing that the trader will be able to supply the product within the period specified by the trader at or before the time at which the payment or other consideration is accepted, whether the Government has studied if an airline contravenes the said provision when the airline oversells air tickets and the number of passengers who subsequently check in as scheduled exceeds that expected by the airline, resulting in some passengers being denied boarding; if it has studied and the outcome is in the affirmative, of the details; if the outcome of the study is in the negative, the reasons for that?

Reply:

President,

     The Trade Descriptions Ordinance (the Ordinance) prohibits some commonly seen unfair trade practices to protect consumers. As the primary enforcement agency of the Ordinance, the Customs and Excise Department (C&ED) has been adopting a three-pronged approach to implement the Ordinance, including promoting compliance among traders, actively handling complaints and taking enforcement actions, as well as carrying out consumer education and publicity activities.

     Having consulted the Transport and Housing Bureau (THB), my reply to the three parts of the question is as follows:

(1) From January 2014 to May 2017, the numbers of complaints related to passengers of airlines being unable to board the scheduled flights received by THB, the Civil Aviation Department (CAD), C&ED and the Consumer Council are listed in Table. In general, if THB and CAD receive a complaint regarding an airline and its customers concerning ticketing, depending on the circumstances of the complaint, THB and CAD would refer the case to the airline concerned and urge it to follow up appropriately or advise the customers to contact the Consumer Council for assistance. For C&ED, upon receipt of a complaint, it will follow up proactively, investigate with detailed analysis of the actual circumstances and relevant evidence, and seek legal advice from the Department of Justice as and when necessary to determine whether prosecution against persons concerned should be made. Among the 71 complaints received by C&ED between January 2014 to May 2017, investigation has been completed for 60 cases, and investigation is underway for 11 cases. Thus far, C&ED has not initiated prosecution under the Ordinance against any airline. Separately, the Consumer Council has been handling customer complaints by means of conciliation to help customers and traders reach settlement.

(2) Similar to other commercial organisations in the service industry, airlines will set out the conditions of sale in relation to its provision of services. Airlines set out the relevant conditions in accordance with the Conditions of Carriage. These conditions would include fares, taxes, arrangements of fees and charges, details concerning refusal of and limitation on carriage, schedules, arrangement for cancellation of flights as well as details concerning compensation and refunds. Upon the purchase of an air ticket, these conditions will form part of the commercial contract between the airline and the customer. The commercial contract is not subject to the Government's regulation but the details of the contract must comply with relevant laws. Customers should check with the airline or its agent on the meaning and applicability of these conditions when purchasing an air ticket.

     Should an airline fail to provide services for any reason after the air ticket is sold, the airline must make necessary arrangements in accordance with the ticket conditions (e.g. arrange another flight for its passengers or provide refunds), so as to minimise the inconvenience caused. If issues of compensation arise due to inability to provide service, the airline and its customer should resolve such issues through conciliation in accordance with the conditions set out in the air ticket. Should the parties fail to reach an agreement, the case can be followed-up through legal recourse.

(3) As aforementioned, should an airline fail to provide services after the air ticket is sold, the airline concerned must make necessary arrangement in accordance with the conditions set out in the air ticket (e.g. arrange another flight for its passengers or provide refunds). On the other hand, the Ordinance prohibits certain unfair trade practices deployed by traders (including airlines) against consumers, such as "false trade descriptions" (including a false trade description made by whatever means and in whatever form, e.g. paper, verbal and advertisement), "misleading omissions" (including omitting or hiding material information, or providing material information in a manner that is unclear, unintelligible, ambiguous or untimely), and "wrongly accepting payment" (including having no reasonable grounds for believing that the relevant product could be supplied at the agreed time or within a reasonable time). Since every case is unique, whether an offence under the Ordinance has been committed should be determined according to the facts (including the act or omission by relevant persons) and evidence of each case. A generalised conclusion cannot be drawn. If consumers suspect traders (including airlines) of infringing the Ordinance, they may lodge a complaint with C&ED. C&ED will look into the case and take appropriate follow-up action.

Ends/Wednesday, June 21, 2017
Issued at HKT 14:00

Annex PDF