Hopes of opening up the duty-free and retail monopoly at Bangkok Suvarnabhumi airport have been dashed after Airports of Thailand (AOT) announced the incumbent operator had lodged the highest bid to retain the business.
While still subject to final ratification by the AOT board, King Power has effectively bought a monopoly on duty-free business at the airport for another decade.
King Power Duty Free has held the rights since the airport opened in 2006, and was competing to continue when the current contract expires next year through until 2031.
“The company that scored the highest is King Power Duty Free Company and the winner offered the highest return than what AOT has received before and higher than AOT estimate (sic),” said Wichai Bunyu, senior executive VP at AOT, in a statement.
Two rival bidders were hoping for a share of the action in what is a lucrative monopoly with prices unmonitored or regulated. The losing bidders were a joint venture between Bangkok Airways and South Korea’s Lotte, and another involving Royal Orchid Hotel Thailand, Empire Asia Group and a subsidiary of World Duty Free Group.
Leading Thai retail business Central Group and Minor International did not submit bids before the deadline.
Having selected the winning bidder, the appointment process is a mere formality, subject to ratification of AOT’s remuneration committee next week. According to Reuters, that will decide the technical score and revenue King Power would share with AOT before the board of directors officially approves the winner on June 19.
The Thai government had ordered a review of duty-free auction period amid monopoly concerns after more than a decade of dominance by King Power. But that apparently had no effect.
The winning bidders to operate duty-free shops at Changi Mai, Hat Yai and Phuket airports were expected to be released today (June 3) with King Power almost certain to win those contracts as well.