Airports of Thailand Public Company Limited (AOT) has announced that King Power wins the duty-free concession for the operation in Don Mueang Airport (DMK) with a minimum guarantee for the first year of ฿1.5 billion (excluding pick-up counter) and a 20% revenue share (increased from 15%).
The contract, granted King Power the right to operate the business for a period of 10 Year 6 months from 1 October 2022 – 31 March 2033, is expected to be signed within January 2020.
Despite the plummet in share price on December 24, 2019, Mr. Nitinai Sirismatthakarn, President of AOT, asserted that the 1.5 billion baht of minimum guarantee, proposed by King Power, was higher than expected and also higher than the revenue forecast in 2022.
The reporter stated that in the previous contract, King Power offered a return to AOT around 756 million baht per annum for the concession in Terminal 1.
Asia Wealth Securities (AWS) has a positive view of the issue although it is difficult to compare with the original contract as the original contract at Don Mueang Airport is the total contract between revenue from duty-free and pick-up counters (total revenue in 2019 is at Bt2.4bn, representing 3.9% of total revenue in 2019).