The Airports of Thailand (AoT) has approved King Power Development Company Limited to run the duty free pick-up counter service at Bangkok Suvarnabhumi International Airport (BKK).

The decision was made during a Board of Directors meeting yesterday (19 February) after rights were granted last year to launch a tender process.

King Power and Bangkok Airways Public Company Limited had lodged their respective interests in purchasing documents, with King Power emerging as the sole proposer.

FINANCIAL OFFER SURPASSES EXPECTATIONS

The contract term runs from 28 September 2020 to 31 December 2030.

AoT said the approval of King Power was based on a strong financial offer that exceeded the first year’s minimum annual guarantee (MAG) and the landlord’s expectations.

“Such compensation will be adjusted every year in line with the inflation rate, according to the Ministry of Commerce, and the growth of the number of passengers (international) throughout the contractual term,” said AoT.

Under the terms of the tender, the winning bidder would be offered the opportunity to run pick-up counters in cities across the country. The Thai airports operator also announced it would run its own duty free pick-up counters.

In introducing the pick-up counters, AoT aims to make it easier for tourists to purchase goods for collection at the airport to boost non-aeronautical income.

Last month, it issued a tender to operate duty free pick-up counters at Don Mueang Airport for a period of ten years (1 October 2022 – 31 December 2032).

Documents were made available to purchase last month. Proposals are due on Friday 13 March with the highest bid declared on 17 March.

RENT RELIEF FOR OPERATORS

In separate but related news, the AoT has revealed a package of assistance measures to dampen the impact felt by operators due to the coronavirus (Covid-19) outbreak and associated fall in tourist numbers.

During the aforementioned Board of Directors meeting, AoT decided to approve support measures for the six international airports under its umbrella: Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Mae Fah Luang – Chiang Rai and Hat Yai.

A 20% discount on fixed monthly fees will apply from 1 February – 31 January 2021 with further discount guidelines to be considered by management and proposed to the AoT Board of Directors for the period 1 February 2021 – 21 March 2022.

A discount on percentage-based fees with monthly/annual MAG will apply. The percentage-based fees with monthly/annual MAG shall be collected from 1 February – 31 March 2022 only.

AoT says it reserves the right to change, correct or cancel the above assistance measures where appropriate in accordance with the Covid-19 situation.

In addition, AoT will extend payments of concession fees from February – July 2020 for another six months if requested by operators.

AoT will proceed in accordance with the law in the case of those who have been granted concessions or are governed by the Public-Private Partnership ACT.

The operator adds that the measures in question will result in a 5% decline in revenue based on the operating results in the fiscal year 2019.

“This disease is considered a public health emergency worldwide,” said AoT. “It has a direct impact on the national economy and national confidence in tourism.

“In addition to social and economic assistance AoT still has measures to support public health by supporting a budget of 21.82 million baht to the Ministry of Public Health to purchase 17 thermoscan thermometers, which will increase the efficiency of passenger screening in the airport to cope with new strains of disease in the future, leading to the confidence of users as well as creating a good image for Thai tourism.”

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