AOT board delays King Power Duty-Free contract revision, expects conclusion by December
The Airports of Thailand (AOT) board delays decision on King Power Duty-Free contract revision, with two options under consideration. A conclusion is expected by December 2025.
The Airports of Thailand Plc (AOT) board has delayed its decision on revising the King Power Duty-Free contract, as reported on Saturday. The delay follows a detailed discussion regarding the impact of the contract on AOT’s operations and finances. A final decision is expected to be made at the next meeting in December 2025.
A source from AOT explained, “This meeting covered several issues, and the King Power contract revision has many details, so the agenda item has been postponed to the next meeting. We expect a conclusion to be reached by December.”
Previously, AOT assigned Mahidol University to evaluate the possible options, which include:
- Cancelling the duty-free concession contract and reopening the bidding process.
- Negotiating a revision of the concession contract.
The source added that cancelling the contract would not benefit AOT, as it would result in significant losses, including delays in finding a new operator and the loss of revenue until a new contract is awarded. Furthermore, the disruption would negatively impact passengers, who would not receive services during the operator search. It is estimated that reopening the bidding process would take around 14 months, further affecting AOT's revenue. Moreover, the new bidding process might offer lower returns for the state.
The preferred solution seems to be contract negotiations, which would avoid these complications. This would involve revising the Minimum Guarantee (MG), reducing the annual minimum fee agreed in the original contract.
King Power Duty-Free Co., Ltd. (KPD) won the bidding for the duty-free concessions in 2019, offering a Minimum Guarantee of 23.548 billion baht for the first year of the three contracts, broken down as follows:
- Suvarnabhumi Airport Duty-Free: 10 years and 6 months, from 28 September 2023 to 31 March 2034, with a Minimum Guarantee of 15.419 billion baht in the first year.
- Phuket, Chiang Mai, and Hat Yai Duty-Free: 10 years and 6 months, from 28 September 2023 to 31 March 2034, with a Minimum Guarantee of 2.331 billion baht in the first year.
The final decision on the contract revision is expected to be made soon, with AOT aiming to balance the interests of both the state and the public.
