SOUTH KOREA. Korea Airports Corporation (KAC) is finalising its plans to tender the valuable duty free concession at Busan’s Gimhae International Airport, with the official process now set to begin in July.
“We plan to issue the notice of bid in early July,” confirmed In Sik Park, KAC’s Gimhae Terminal Operations & Planning Manager.
Speaking to The Moodie Report today, Park said that a firm date and other details for the tender are still being finalised. “This may be decided by the end of June,” he said.
Potential bidders will need to be prequalified with the Korea Customs Service, with the main criterion that the company is already operating a duty free store in an airport or downtown.
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In Sik Park, KAC’s Gimhae Terminal Operations & Planning Manager, anticipates keen interest in the forthcoming duty free tender |
There will be no EOI phase for the bid. The contract will be for a maximum of six years, with an optional one-year extension, based on a fixed rental plus percentage of sales formula.
Soon after the new concession commences, KAC will expand the 1,000sq m Departures duty free store by 35% as part of a major extension to Gimhae’s international terminal that is scheduled for completion in 2015.
Lotte Duty Free Shop has held the duty free concession since the terminal opened in 2007; its contract expires this October.
“We think most major companies in Korea will be interested,” Park said.
Contenders will almost certainly include The Shilla Duty Free, Walkerhill Duty Free and Shinsegae Duty Free (the latter took an 81% holding in Busan’s Paradise Duty Free in September 2012), along with leading international players.
Dongwha Duty Free’s participation may be influenced by the 19.9% stake taken by Shilla this month.
A full report on Gimhae International Airport’s commercial prospects is published in The Moodie Report Print Edition for May 2013,
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Lotte Duty Free Shop has held the duty free concession since the international terminal was inaugurated in 2007 |
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Pick-up counters at Gimhae International Airport for purchases made at duty free stores elsewhere in South Korea; these names will be among the principal competitors for the airport concession |
About Gimhae International Airport
In operation since 1958 and at its current location since 1976, Gimhae International Airport serves South Korea’s second city, Busan (population 3.6 million). Gimhae handled a total of 9.2 million passengers in 2012, 5.2 million domestic and just over 4 million international. Its international traffic is growing at an average of +12% per annum. Domestically it has four airlines flying to three cities, with 22 international airlines on routes to 30 cities, mostly in Northeast Asia.
