THAILAND. King Power International Group today confirmed that it has received a letter from Airports of Thailand (AoT) PLC, dated 3 May (but received by King Power via mail on 8 May) regarding its duty free and master concession contracts at Suvarnabhumi Airport. These were the subject of an announced termination – one not communicated to King Power – on 22 March.
King Power said today that the AoT communication consisted of a two paragraph letter, accompanied by a floor plan of the airport building.
“There is no reference in the letter to any change in the existing business circumstances, or cessation of any of the existing businesses, or any future steps that need, or will, be taken by Airports of Thailand“ |
The first paragraph related to requests for modifications to some shops and commercial areas at the airport, citing safety and security compliance. This was in respect of clear routes to fire exits and front access to electrical switch rooms. “A total of 30 amendments were stipulated and were specified on an attached airport floor plan. The deadline for completion of modifications for safety compliance is 30 days, from the date of letter. The modifications are to be inspected by both parties after that date.”
King Power continued: “In fact the amendments requested in the letter reflect modifications already agreed and negotiated in recent months between King Power International Group and Airports of Thailand. Almost all works have already been completed.”
Furthermore, King Power said, the company and AoT have shared the same Life Safety consultants throughout the entire design and building approvals process.
The second paragraph refers to contracts with Airports of Thailand PLC. These are the contract with King Power Duty Free Company Limited to operate all Duty Free outlets at Suvarnabhumi Airport, and the contract held By King Power Suvarnabhumi Company Limited to operate and manage all commercial areas at Suvarnabhumi airport.
The letter states that as a consequence of legislation relating to The Public-Private Joint Venture Act of 1993 no contracts ever legally existed.
Because of the ambiguity of the letter King Power International Group has asked its lawyers to review the wording in order to ascertain AoT’s intentions.
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A feeling of the Sense of Place within the impressive commercial offer at Suvarnabhumi; King Power is hopeful of a “sensible outcome” to the controversy | |
Importantly, the company states, “There is no reference in the letter to any change in the existing business circumstances, or cessation of any of the existing businesses, or any future steps that need, or will, be taken by Airports of Thailand PLC. Our lawyers are still reviewing the contents of the letter.
“King Power International Group would also like to highlight that there has never been an occasion historically where the Government of Thailand has rescinded, or not honoured, contracts with third parties executed by a previous government. King Power Duty Free Company Limited and King Power Suvarnabhumi Company limited are fully committed to co-operating with Airports of Thailand PLC to resolve this matter, in due course.”
This media release updates an open letter to the industry by King Power to be published in selected trade publications next week to coincide with the TFWA Asia Pacific show.
“On the supplier side the response has been overwhelmingly supportive“ |
That letter had been strictly embargoed until next week – an embargo respected by The Moodie Report and Doug Newhouse’s Travel Retail Business – but that embargo is now lifted following today’s developments.
In it King Power (which at time of issuing the open letter had received no correspondence from AoT) writes: “It is very much business as usual with our airport operations. We have almost 6,000 very loyal and dedicated staff employed directly by us, between our various businesses. They particularly are working professionally and determinedly, in clearly difficult circumstances.
Our business in Thailand has existed for 19 years. There have been crises in the past. Many of our staff have been with the company since the very early days, and remember those difficult times. They also remember that even in previous times of crisis none of them lost their jobs, and none of them suffered any reduction in their salaries.
“Rest assured of our determination… to maintain the retail and commercial environment that we have built at Suvarnabhumi Airport“ |
“On the supplier side, again the response has been overwhelmingly supportive. Our supply partners appreciate that we endeavor to run our business with the highest level of professionalism, irrespective of any adverse circumstances, and that we have overcome adversity in the past.
“Our supply partners also remember the past times of crisis, and that there has never been an occasion when King Power International Group has defaulted on any of its commitments, whether they were of a financial nature, or of any other agreed commercial or moral principle.”
It concludes: “We are hopeful that ultimately there will be a sensible outcome, decided by the Government of The Kingdom of Thailand. Rest assured of our intention, and commitment, to ensure the long-term success of our mutual business at Bangkok Airport, and our determination to endeavour to maintain the retail and commercial environment that we have built at Suvarnabhumi Airport.”
For the full text see The Moodie Report Print Edition, out soon.
