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Hong Kong Rejects Fund For Airline Wind-Ups

by Mary Swire, Tax-News.com, Hong Kong

23 May 2008


The Hong Kong government has no plans to form a fund specifically for compensating travellers and travel agents in the event of an airline closure, according to Secretary for Transport and Housing, Eva Cheng.

Chang told the Legislative Council on 21st May that because the airlines in the market at present are vastly different in scale, and internationally there is no precedent for reference for setting up this type of funds, there would be significant difficulties implementing it.

Levies for any compensation fund will often be borne by consumers and would likely to lead to increases in airfares, she argued.

"We would thus need to consider this carefully with a view to balancing the development of the industry and the need to protect the interests of consumers and travel agents," Cheng stated.

The Financial Services & the Treasury Bureau will start the Companies Ordinance rewrite exercise phase II next year, and review the winding-up related provisions, it was further announced.


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