Large Incheon operators moot 24th April extension for relief submissions

By Luke Barras-hill and Andrew Pentol |

Lotte-LT-Incheon-tender-2020South Korean travel retail conglomerates have requested that Incheon International Airport Corporation (IIAC) pushes the deadline for 20% minimum annual guarantee (MAG) discount applications until 24 April, according to sources close to the matter.

It is unclear whether IIAC has accepted the extension [although it is gathered that IIAC is currently considering it – Ed] and TRBusiness is awaiting for an official response.

One retailer source suggests the ‘big three operators’ have already submitted applications on 13 April, five days after the original deadline.

As reported, Lotte Duty Free, The Shilla Duty Free and Shinsegae Duty Free asked IIAC to postpone the initial 8 April deadline.

Those parties had refrained from submitting applications after expressing misgivings related to a decision to suspend MAG linked to passenger levels for a six-month period in the next contract year (2021).

Retailers would forfeit any base level reduction (9%) in MAG that year should they choose to avail themselves of the 20% rate cut on offer, it is reliably understood.

The source says the retailers still ended up applying for the MAG reduction, albeit a few days late, but did not agree to the IIAC clause.

It has been suggested that should passenger volumes normalise to pre-Covid-19 levels next year, a rent increase of up to 9% would be payable to IIAC in 2022.

“We have asked to exclude the proviso clause (giving up the 9%-added-or-deducted-MAG for the second year),” said one retailer source.

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