As per a report by a local media outlet citing sources at Airports of Thailand Public Company Limited (SET: AOT), King Power Duty Free Company Limited formally requested AOT in May regarding a discussion on the potential termination of its duty-free concession contracts at three regional airports—Phuket, Chiang Mai, and Hat Yai.
The contracts, originally signed to run from September 28, 2020, to March 31, 2033, have been under strain due to multiple global disruptions.
King Power cited ongoing challenges, beginning with the COVID-19 pandemic, which prompted AOT to change its calculation method for minimum guarantee payments to a per-passenger sharing scheme, currently set at THB 127.30 for each departing, transit, and arriving passenger.
However, the company argued that persistent effects from the pandemic—followed by new obstacles like regional wars, ongoing trade disputes, tariffs, and a global economic slowdown—have severely impacted passenger numbers, particularly from high-spending Chinese travelers, and dragged down sales.
The company outlined seven force majeure factors impacting its performance, driving the compensation it owes AOT above reasonable projections and leading to losses fueled by an “abnormally high” and unsustainable payment structure.
King Power said it has to defer payments occasionally, arguing that these adverse circumstances were beyond the company’s control and that AOT has acted unilaterally in addressing contract matters, without seeking fair solutions for both parties.
Given the unresolved and unpredictable situation, as well as King Power’s concerns over contract fairness, the firm requested urgent talks to explore a path forward—including the possibility of contract cancellation—within a 45-day timeframe.
During these negotiations, King Power has proposed remitting 20% of its monthly duty-free sales as interim compensation. The company will submit payment for July 2025 by August 29, 2025, and is seeking AOT’s assurance that these arrangements will not be treated as a breach of contract until the ongoing dispute is resolved.
