Report Duty-Free Drama: King Power Wants Out of AOT Airport Deals

[webfact]

File photo courtesy of King Power

 

King Power Duty Free Company Limited (KPD) has formally requested a cancellation of its duty-free concession contracts with Airports of Thailand (AOT). This move affects key airports, including Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, and Hat Yai, and rocked the market as AOT's stock nosedived by 8.40% following the announcement.

 

AOT swiftly convened a board meeting on June 16 and announced the formation of a task force to navigate this business challenge.

 

Acting CEO Paveena Jariyathitipong stated that the board is consulting with university experts to explore legal and economic alternatives, set to conclude their study by August 2025. AOT relies heavily on revenue from King Power, which constitutes 17% of its total earnings, so the company is pushing forward with plans to diversify its income streams to buffer against this shift.

 

Despite the disruptions, Thibodi Wattanakul from the State Enterprise Policy Office remains hopeful that any lost revenue due to duty-free concessions could be mitigated if AOT secures new tenants.

 

Approximately 3 billion baht (about £70 million) annually is at stake from these contracts, with a significant portion linked to Suvarnabhumi Airport. The Ministry of Finance, a stakeholder in AOT, is keenly observing the situation as both parties adhere to contractual rules, including penalties if termination proceeds.

 

The timing of this cancellation request follows the appointment of King Power's new CEO, Nitinai Sirisarntkarn, who has oversight experience having served as AOT’s CEO for eight years.

 

King Power cites declining tourist numbers and reduced tax incentives as primary triggers for their decision. They propose a transitional concession-fee arrangement during renegotiations, emphasising that their operations have become untenable due to factors like COVID-19 and global economic slowdowns.

 

With KPD's current contract with AOT valid until March 2033, the pressure is on both companies to reach a resolution within the 45-days negotiation window set by KPD.

 

However, AOT remains unmoved financially by these developments if they can swiftly find replacement partners to fill the commercial void left by King Power. The discussions set for June 17 will be crucial in paving the way forward in this unfolding business saga.

 

  Adapted by ASEAN Now from Khaosod 2025-06-17

 

 

[watchcat]

4 minutes ago, webfact said:

King Power Duty Free Company Limited (KPD) has formally requested a cancellation of its duty-free concession contracts with Airports of Thailand (AOT).

 

It should be called non duty-free.

[ozz1]

People have woken up that duty free is a scam maybe with the rents they pay it can't be cheap 

[Artisi]

The move is probably based on excessive rental, AOT thought they have a captive audience and are screwing king power on prices.

As as being duty-free a lot of their stuff is no cheaper than outside the airport. 

[CMFarang]

When a monopoly in their favor created a mono-boring shopping experience across all the KP shops , it was good for business.   Now this move isn't about what is being said , really,  it's about a new business plan in which KP or a subsidiary will make out like bandits.  Or as I like to say , Let the games begin ..

[ikke1959]

Good to hear.. Hopefully the new duty free shop will be really duty free instead of being more expensive than other airports or even the shops in the country... The greed have brought them down... and than we don't speak about the possibility of counterfeit products that once were sold by King Power...

[ChrisY1]

Back in the day, KP demanded the monopoly in Thai airports and AOT obliged....obviously a lot of money changed hands.

I don't know of any enterprise here that could successfully take over this businesses departure......but whatever,KP have had their day ripping people for age "duty free" products