Airports of Thailand Public Company Limited (SET: AOT) has announced the Board of Directors decision held on December 2, 2025, to amend the concession conditions in duty-free business operation at airports under AOT’s supervision in a negotiation with King Power Duty Free Company Limited (KPD).
AOT disclosed information through the Stock Exchange of Thailand that resolved to approve the negotiation results for solutions to issues in duty-free business operation at airports under AOT’s supervision, comprising Suvarnabhumi Airport (BKK), Don Mueang International Airport (DMK), Phuket International Airport (HKT), Chiang Mai International Airport (CNX), and Hat Yai International Airport (HDY).
AOT considered two primary options – either contract amendment or contract termination for a new bidding process – and concluded that the most suitable option is to amend the contract by adjusting the concession conditions in alignment with the actual circumstances arising during contract management, while taking into account the following factors:
(1) Ensuring business continuity: AOT will be able to provide continuous passenger services with a good Level of Service, as duty-free retail service is considered an essential component. In other words, AOT will not need to seek a new concessionaire, considered as a time and cost consuming process. Also, there is uncertainty associated with sourcing a replacement concessionaire – a process that may take no less than 14 months.
(2) More stable revenue: AOT will continue to receive concession fees (at an appropriate level) without experiencing any revenue gap during the bidding process for a new concessionaire, and any revenue loss due to the absence of a service provider.
(3) Reasonable return: The study found that the contract amendment provides a financial return higher than the minimum return expected from seeking a new concessionaire under the current circumstances, and not lower than the proposal submitted by the second-ranked bidder in the previous tender.
(4) Minimizing economic damage: Other than causing AOT to lose revenue and lowering the Level of Service, contract termination will also affect overall employment among related operators, thereby impacting the overall economy. This approach allows the project to continue operating and helps reduce potential adverse impacts, caused by related operators, on the overall economy and employment rate.
The contract amendment approach will be more beneficial to AOT than terminating the contract and initiating a new bidding process. In the event of contract termination, AOT will lose revenue from concession fees until a new concessionaire is appointed, which is expected to take no less than 14 months. Moreover, the new concessionaire may be unable to offer concession fees at a level comparable to or higher than those of the current concessionaire (given the current economic conditions both domestically and globally).
AOT notes that each contract still maintains the conditions of collecting (1) minimum guarantee (MG): AOT still receives minimum guarantee, with an annual growth rate of 5 percent; 2) 20 percent revenue sharing; and 3) additional concession fees (Upside).
If the specified conditions are met, the details of the proposed solution for each airport are as follows:
1) BKK (Suvarnabhumi Airport)
Solution: The minimum guarantee (MG) on a per-passenger basis continues to be collected under the same passenger-based principle, and shall be charged annually (equivalent to 232.90 Baht per passenger with a continuous annual growth rate of 5 percent). In addition, AOT has negotiated an additional revenue-sharing component of 35 percent on the excess spending per head This demonstrates that AOT has an opportunity to obtain additional revenue in the event of recovery in the aviation industry, which exceeds the original contract that provided only a 20-percent revenue-sharing rate throughout the contract term.
2) DMK (Don Mueang Airport)
Solution: The minimum guarantee fee per square meter shall continue to be collected (calculated at 39,187.76 Baht per square meter per month), along with the revenue sharing of 20 percent as stipulated in the original contract. If passenger traffic recovery exceeds 100 percent, AOT will return to the previously agreed minimum guarantee rate per square meter.
3) HKT, CNX and HDY (Regional Airports)
Solution: The minimum guarantee (MG) continues to be collected under the same passenger-based principle, and be charged annually (equivalent to 129.67 Baht per passenger with a continuous annual growth rate of 5 percent starting from 2030, due to changes in passenger spending behavior at regional airports and a significant decline in passenger volumes following the COVID-19 situation, or an average of 134.70 Baht per passenger over the contract term). In addition, AOT has negotiated an additional revenue-sharing component of 35 percent on the excess spending per head, subject to the same conditions as those applied at BKK. This demonstrates that AOT has an opportunity to obtain additional revenue in the event of an improvement in the aviation industry, which exceeds the original contract that provided only a 20-percent revenue-sharing rate throughout the contract term.
Additionally, AOT adds that after the contract amendment, in the event that the business returns to its original state as outlined in KPD’s duty-free business proposal, AOT reserves the right to collect concession fees as proposed in KPD’s proposal.
