THAILAND. Airports of Thailand (AOT) yesterday approved the bid results for three key commercial concessions at its major airports, confirming King Power International Group and its subsidiaries as winners and revealing details of the minimum guarantees it will pay under its new contracts.
AOT President Nitinai Sirismatthakarn said: “AOT believes that this bidding process will give the highest financial benefits to AOT and to the country.” The contracts are expected to be signed in July.
The AOT Board of Directors approved the bid from King Power Duty Free Co., Ltd to run the duty free business at Bangkok Suvarnabhumi Airport. As we reported, it headed rival offers from a Bangkok Airways/Lotte Duty Free alliance, and a partnership between Royal Orchid Sheraton (Thailand), Empire Asia Group and Dufry-owned World Duty Free Group.
The contract, AOT confirmed, will run from 28 September 2020 to 31 March 2031. AOT said it would collect 20% of revenue monthly before deduction of expenses (excluding VAT) or the first year’s minimum guarantee of Bt15,419,000,000 (US$498 million) offered by King Power. AOT will make adjustments to increase the minimum guarantee in the following years under a MAG formula (based on the passenger growth rate and the inflation rate from the previous calendar year).
King Power won the bid with the score of 94.3 and topped the financial bidding with its offer above. Second ranked was Bangkok Airways/Lotte Duty Free with a score of 83.10 and proposed financial offer of Bt8.156 billion. Royal Orchid and Dufry had a score of 78.85 and proposed financial offer of Bt7.255 billion.
In addition, for duty free at the regional airports of Phuket International, Chiang Mai International and Hat Yai International, King Power will pay 20% of revenue in any given month or the first year’s minimum guarantee of Bt2,331,000,000 (US$75 million). Contracts at these locations will also run from 28 September 2020 to 31 March 2031.
King Power won this contract with a score of 96.10 and minimum financial offer as noted above. Second was the Royal Orchid-Dufry partnership with a score of 86.72 and proposed offer of Bt2.012 billion a year. Third was Bangkok Airways and Lotte with a score of 84.74 and an offer of Bt2.108 billion.
King Power Suvarnabhumi Co., Ltd also captured concessions for other commercial zones at Suvarnabhumi (including food & beverage, services and foreign exchange), as reported, with the same contract term.
AOT said it would collect 15% of monthly revenue before deduction of any expenses (excluding VAT) or the first year’s minimum guarantee of Bt5,798,000,000 (US$187 million) as offered by King Power. AOT will make adjustments to increase the minimum guarantee in the following years based on the passenger growth rate and inflation in the previous calendar year.
King Power won this contract with a score of 95.20 and proposed offer per year as noted above. Next in these rankings was Central Pattana with a score of 80.81 and proposed offer of Bt3.003 billion.
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