On June 13, 2025, King Power Duty Free Company Limited formally requested to terminate its duty-free concession contracts with Airports of Thailand Public Company Limited, triggering concern across Thailand’s aviation and investment sectors due to the scope of the cancellation, which spans five major airports.
BANGKOK — King Power Duty Free Company Limited (KPD) has submitted a formal request to cancel all its duty-free concession contracts with Airports of Thailand Public Company Limited (AOT), a move that could reshape the commercial landscape across Thailand’s major airports.
The development was first reported on social media on June 13 and was later confirmed by AOT. The termination request affects operations at five of the country’s most important airports: Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, and Hat Yai. These sites collectively account for a significant portion of Thailand’s air passenger and tourist traffic.
In response, AOT convened a board meeting on June 16 to address the matter. Acting Chief Executive Officer Paveena Jariyathitipong stated that the board has resolved to form a working committee tasked with identifying operational alternatives for duty-free services at the impacted airports. Consultants from state universities will be appointed within two weeks to conduct an in-depth study focusing on legal, financial, economic, and business aspects. The findings are expected to be delivered within 60 days, by August 2025.
AOT’s financial exposure is significant, as revenue from King Power accounts for approximately 17% of the company’s total income. However, Jariyathitipong emphasized AOT’s ongoing efforts to broaden its revenue base. These efforts include expanding services in areas such as electrical and air conditioning systems, ground handling, and the commercial development of property around its six airports. These initiatives are intended to mitigate risks stemming from a potential concession termination and ensure long-term financial stability.
AOT has scheduled a meeting with King Power for June 17 to further discuss the matter and explore viable resolutions. The company clarified that any outstanding dues from King Power remain within the collateral secured under the terms of the existing agreements. These securities were designed to protect against financial risk during unforeseen events.
From a policy perspective, Thibodi Wattanakul, Director of the State Enterprise Policy Office (SEPO) under the Ministry of Finance, said the government is monitoring the situation closely. He noted that although King Power’s leases contribute about 33% of AOT’s annual treasury obligations—equivalent to roughly 3 billion baht—a significant portion of this income stems from Suvarnabhumi Airport. He stated that if new concessionaires are successfully appointed, losses to the state could be avoided.
Wattanakul added that any termination would need to follow contractual obligations, including financial penalties where applicable. As the Ministry of Finance holds shares in AOT, it will review the situation alongside other shareholders to assess the broader implications on state revenue.
The timing of King Power’s cancellation request closely follows the appointment of Nitinai Sirisarntkarn as the company’s new CEO on June 4. Nitinai is the former two-term CEO of AOT, and his new role at King Power brings heightened scrutiny to the unfolding negotiations.
In its letter to AOT, King Power cited several factors for the termination request. These include the government’s directive to halt inbound duty-free shop operations, a reduction in alcohol-related taxes that has undermined sales, loss of commercial space previously allocated by AOT, and concerns over insufficient public-sector initiatives to ensure tourist safety—particularly as Chinese tourist arrivals have declined. Broader macroeconomic challenges, such as the lingering impact of COVID-19, global trade disputes, and the economic slowdown, were also listed as causes.
“These conditions have severely affected our ability to operate under the existing contracts,” the letter stated, noting the impacts were both direct and indirect and stemmed from force majeure conditions beyond the company’s control.
King Power’s concession agreement with AOT is set to run until March 31, 2033, having begun on September 28, 2020. In its proposal, the company has asked to pay concession fees at 20% of monthly sales starting in July, while requesting that this arrangement not be considered a contractual default. It has also requested that negotiations be completed within 45 days.
The outcome of the ongoing talks could reshape Thailand’s duty-free retail market and impact investor confidence in AOT’s long-term commercial strategy. Observers are awaiting further announcements from the June 17 meeting.
