UPDATE: Following talks on Monday (June 16), AoT confirmed that King Power was threatening to close its outlets at five international airports: : Suvarnabhumi, Don Mueang, Chiang Mai, Phuket and Hat Yai.
SET-listed AoT, which operates six international airports across Thailand, including Phuket International Airport, acknowledged on Friday that King Power had submitted a memo to its president last month requesting discussions to end its contracts to operate duty free retail spaces at Phuket Airport, Chiang Mai Airport and Hat Yai Airport.
The request cited impacts from the coronavirus pandemic, which was followed by circumstances such as the trade war between the United States and China, heightened tariffs and a significant reduction in Chinese tourist arrivals.
The duty-free retail giant also pointed out that the COVID situation prompted AoT to increase its revenue sharing per head rate to B127.30 per traveller.
A total of seven unforeseen matters were outlined by the retailer as having critically affected its ability to turn a profit and had made AoT’s fees no longer reasonable.
Among the seven issues was an apparent deviation from the terms of reference in the contract between King Power and AoT due to a government policy shift in 2024, duty reductions for wine, a lack of proactive state measures to bolster confidence for Chinese tourists and a general downturn in overall tourism.
Admitting to a lack of confidence in persisting at the three terminals, King Power asked that a conclusion be reached on its request within 45 days of its submission.
While the company awaits a decision by AoT, it said it will only be paying 20% of its contractual rate from sales.
The announcement wiped B36 billion from AoT’s stock value by Friday afternoon. The airport operator has lost 50% of its value since the start of the year and is currently at its lowest valuation in a decade.
AOT RESPONDS
AoT responded with a public statement on Saturday, that reads:
AOT Confirms Solution Found with King Power Duty Free
Airports of Thailand Public Company Limited (AOT) has clarified the situation regarding King Power Duty Free Company Limited (KPD), which sent a letter to AOT about the contract for operating duty-free shops at Phuket Airport, Chiang Mai Airport and Hat Yai Airport.
In response to the letter, AOT’s management will present the proposed solution to the AOT Board of Directors at its meeting on Monday, June 16, 2025. Initially, AOT management plans to establish a committee to review the solution, negotiate, and hire state university consultants to study and analyze alternative approaches to resolving the issue of duty-free shop operations at airports under AOT’s responsibility. The goal is to find a solution that is suitable for the current business operations and economic situation, while ensuring neutrality in the contract analysis.
The study is expected to be completed within 60 days and will then be submitted to the AOT Board for consideration, feedback, and improvements to ensure the guidelines are more effective and beneficial to AOT.
AOT has emphasized that this matter will not affect the quality of passenger services, and KPD will continue to operate duty-free shops at AOT airports as usual. AOT remains committed to managing its airports based on good governance, transparency, and accountability, while protecting the interests of service users, investors, and the national economy, and upholding Thailand’s image as a global hub for tourism and air transportation.