Airports of Thailand postpones duty free auction to address monopoly concerns

[BANGKOK] Airports of Thailand PCL (AOT) will postpone the auction for its biggest duty-free concession by as much as two weeks to address public concern about the process' perceived monopolistic structure, its president said on Monday.

The announcement comes as Prime Minister Prayuth Chan-ocha last week called for a review of the auction, after retail groups and activists objected to the winning bidder being granted control of duty-free operations at multiple airports.

Up for auction is a licence to sell duty free goods at airports in Chiang Mai, Hat Yai and Phuket, as well as at Suvarnabhumi, the country's main airport accounting for 82 per cent of the four's daily duty-free sales.

The airports operator will also postpone its auction for a separate licence to manage other commercial activity at Suvarnabhumi Airport such as shop and restaurant space.

AOT earned 16.7 billion baht (S$712.7 million) from concessions in its last fiscal year, 13.3 per cent more than a year earlier.

"We will delay selling bidding documents, initially set for March 19. We'll address any concerns and take around one to two weeks," AOT President Nitinai Sirismatthakarn told reporters.

He said winning bids will be announced in September.

The duty-free business is a major beneficiary of a tourism boom in Thailand where 2018 arrivals exceeded 38 million people.

King Power Duty Free Co Ltd, owner of the English Premier League's Leicester City Football Club, currently holds the licences for duty-free retail and commercial activity at Suvarnabhumi Airport, both expiring in 2020. It also holds a licence to operate collection counters for duty-free goods bought elsewhere, as well as other licences covering other airports.

King Power declined to comment.

Mr Nitinai said the system was not monopolistic, and that AOT bundled four airports under the duty-free retail concession to better attract bidders to smaller airports with lower sales volumes.

"This model is for strong companies. We want a strong company who can compete globally," Nitinai said. (Reporting by Panarat Thepgumpanat and Chayut Setboonsarng; Writing by Patpicha Tanakasempipat; Editing by Christopher Cushing)

REUTERS