Presently, KPD will continued to operate the duty free shops across the five airports in question.

Airports of Thailand (AOT) has released a statement in response to the submission of a request from King Power Duty Free (KPD), engaging the operator in discussions in the possible termination of duty free concessions contracts at five airports. 

Addressed to the President of the Stock Exchange of Thailand, the letter concerns current concessions operations at: Suvarnabhumi Airport; Don Mueang International Airport; Phuket International Airport; Chiang Mai International Airport; and Hat Yai International Airport.

The development follows reports across several regional media outlets of a submission from KPD for contract renegotiations in May 2025 concerning: Phuket International; Chiang Mai International; and Hat Yai International Airports.

Factors cited by King Power included: cessation of the operation of inbound duty-free shops as in line with government policy; tax reduction on wine affecting sales volume of duty-free shops; reclamation of AOT’s commercial space; a decline in the number of Chinese tourists, Thailand’s domestic situation negatively impacting the number of tourists and passengers, the ongoing effects of the  COVID-19 pandemic, global conflict and macroeconomic issues.

“All of these factors have direct and indirect effects on KPD’s inability to operate business and comply with the established contracts and caused KPD’s continuous loss. The abovementioned force majeure factors are beyond KPD’s control,” said Krit Pakagij, Corporate Secretary for AOT.

Pakagij added: “AOT received such letter from KPD requesting for a discussion on solutions to be able to continue its business or other settlements as well as possible termination of contracts.

AOT and KPD need to mutually negotiate solutions based on fairness for both parties as in compliance with the defined terms and conditions of contracts.”

AOT noted it is currently looking to procure consultant services from an as yet unnamed public higher education institution to conduct a study and analyses into suitable solutions for the ongoing struggles at its duty free operations.

UPDATE:

AOT recently released a separate but related statement notifying the nation’s Stock Exchange of a recent resolution from its Board of Directors regarding the ongoing situation with KPD.

Resultant of a meeting of its Board of Directors, AOT management has been tasked with appointing a working group to provide solutions for the ongoing duty free shop operation problems at AOT’s airports, a process which will include the recruitment of a higher education institution, with due consideration paid to several key factors.

The working group will assess the legal, economic, financial and business management issues which have impacted previous contracts, and seek to propose a suitable and fair approach for all parties.

AOT noted the conclusion is expected to be reached within 60 days before being further proposed to the AOT Board of Directors for consideration.

In the statement, AOT asserted its financial position as stable, despite the lingering concerns over: the loss of inbound duty free shops; tax reductions on wine; reclamation of AOT’s commercial space; a decline in the number of Chinese tourists; and the global conflicts and macroeconomic shifts negatively affecting Thailand’s domestic economy: “AOT would like to inform that AOT still has robust financial stability and plans to seek revenue from other sources such as service fees from 400 Hz Power, Pre-Conditioned Air (PC Air), apron services, ground equipment, ground passenger services project and other related businesses at Suvarnabhumi Airport of the third operator as well as development of commercial land surrounding AOT’s six airports, thus generating non-aeronautical revenue.

AOT assures that AOT still has adequate liquidity for future investment projects and operations as planned without any impact on AOT’s financial stability.”

TRBusiness will continue to update this news article as the discussions between the two parties develop.

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