AOT Submits Plan to Resolve King Power Duty-Free Contract Dispute
Paweena Jariyathitipong, acting president of Airports of Thailand, is set to brief the board on initial strategies to resolve the long-standing concession issue, while King Power prepares to approach lenders
- Airports of Thailand (AOT) will present a preliminary plan to its board at the end of the month to resolve its duty-free contract dispute with King Power.
- The full resolution is slightly delayed because a study by a university consultant, hired to review the contract, has been postponed.
- King Power is awaiting the proposal, which will influence its financial negotiations, and is prepared to adjust its business model if the outcome is unfavorable.
Airports of Thailand Public Company Limited (AOT) will present an initial strategy to resolve the outstanding duty-free contract dispute to its board of directors at the end of this month.
Paweena Jariyathitipong, Senior Executive Vice President (Engineering and Construction) and Acting President of AOT, told the Krungthep Turakij newspaper that the progress on hiring a university consultant to study the contract issue with the King Power Group remains incomplete.
She anticipates a slight delay of approximately two weeks from the original October target date for the study's conclusion.
"AOT's signing of the contract with the educational institution was delayed from the schedule, which necessitates providing additional time for the study," Paweena explained. "The overall situation is likely to be slightly delayed from the initial plan, but the appropriate preliminary guidelines will be presented to the AOT Board for acknowledgement at the end of this month, before the full details of the study are finalised."
In response, Nitinai Sirismatthakarn, Chief Executive Officer of King Power Corporation Limited, confirmed that the company is currently awaiting the results of AOT's study.
He noted that the initial strategy is expected to be presented to the AOT Board by the end of October.
Once these preliminary guidelines are disclosed, King Power will be able to determine its operational course, which includes using the resolution to negotiate with financial institutions to secure the necessary working capital.
Nitinai warned, however, that if the proposed contract resolution is not favourable, the company will be forced to review and adjust its business model to ensure continuity.
"King Power has already made extensive business adjustments, such as looking at other revenue streams and not solely relying on duty-free revenue at Thai airports. We are seeking opportunities to operate duty-free businesses abroad—for example, our current operations in Shanghai are one such new income source. Furthermore, we are considering inviting other private entities to co-invest in our downtown duty-free operations in the future," Nitinai concluded.
