The Travel Industry Council is assessing the impact of the proposed extension of the Travel Industry Compensation Fund to cover consumers who buy only air tickets through travel agents.

Secretary for Economic Development & Labour Stephen Ip told lawmakers today the study takes into account factors like travel agents' mode of operation, the liability of the parties involved, risk exposure, cost and consumer protection.

The council will examine if it is necessary to establish guidelines for the trade to regulate the operation of travel agents in selling air tickets, including setting the level of deposit required and the timing of ticket issuing.

The council will consult its members, airlines and the Consumer Council during the study.

According to the Travel Agents Ordinance, travellers procuring outbound travel services arranged by travel agents are entitled to ex-gratia payments under the fund in case of default of travel agents. The amount is capped at 90% of the outbound tour fare paid.

Outbound travel service comprises at least two of the following items:

* carriage on a journey which is to commence in Hong Kong;

* accommodation at a place outside Hong Kong; or,

* an activity arranged by travel agents which is to take place outside Hong Kong.