AoT approves further relief measures to mitigate against Covid-19 pandemic

By Andrew Pentol |

Bangkok-Airport-new

Airports of Thailand is expecting a 53% drop in passengers during the fiscal year ending September.

Airport of Thailand (AoT) has approved additional assistance measures for concessionaires and airlines impacted by the Covid-19 crisis across its six airports.

The measures were approved at a Board meeting, which took place yesterday (22 April 2020) and highlighted in a letter to the President of the Thai stock exchange. It is hoped the relief measures will mitigate against the impact of the decline in flight and passenger numbers and be in line with government policies.

As reported, AoT first approved a package of relief measures for the six airports (Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Mae Fah Luang – Chiang Rai and Hat Yai) under its umbrella at a Board of Directors meeting in February.

Long-standing incumbent King Power International captured the BKK duty free contract and concessions at three Thai regional airports (Phuket, Chiang Mai and Hat Yai) last year.

According to an AoT statement released yesterday (22 April), which was seen by TRBusiness, the state-owned company is expecting a 53% drop in passengers this fiscal year ending September 2020 due to Covid-19. Passenger traffic during the period is also expected to drop to 66.58 million and flight numbers are predicted to decrease 44.9% to 493,000.

RELIEF MEASURES SUBJECT TO CONDITIONS

Relief measures on the table include assistance for concessionaires and airlines with office and state property rents, terminal and building service charges and fixed monthly concession fees.

If airlines/concessionaires decide to suspend operations or AoT temporarily closes its airports, airlines and concessionaires will be exempt from paying the above mentioned rents, service charges and concession fees  for nine months. The exemption will be for the period 1 April to 31 December 2020, or until the airlines resume operations (whichever comes first).

Airlines and concessionaires which are continuing to operate under AoT’s supervision will receive a 50% reduction on office and state property rents for nine months (1 April to 31 December 2020).

Terminal and building services charges will be 15% of office and state property rents. Office and state property rents have been reduced by 50%.

For concessionaires which were granted licenses and started operations before 19 February 2020, the rates of concession charges/and or minimum annual guarantees (MAGs) for 2019 will be applied to calculate new rates moving forward. The same principal applies to concessionaires renewing agreements during the period the relief measures take affect (1 April to 31 December 2020).

King-Power-Duty-Free

Long-standing incumbent King Power International captured the Bangkok Suvarnabhumi International Airport duty free contract last year.

Rates of fixed concession charges and/or MAGS for tenants granted licenses, but not commencing operations before 19 February 2020 are calculated based on the rates proposed in tenders of negotiations on returns.

Airlines and concessionaires are only eligible for the relief measures if they have been impacted by the Covid-19 crisis and have legal agreements with AoT before yesterday’s resolution.

AoT said: “In collecting concession charges once agreements on assistance measures are complete, AoT management shall be entrusted to compare passenger numbers in any given year to passenger numbers before the Covid-19 crisis (2019).

“If there are fewer passengers, the rates of fixed concession charges and/or minimum annual guarantees for 2019 shall be applied as collection rates for each airport. Once annual passenger numbers surpass those of 2019, passenger growth rates in these particular years [the years passenger numbers surpass 2019- ed] will be applied as the calculation base for minimum annual guarantees.”

 

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