Bangkok Airways, Lotte tie up for duty-free contracts in four airports

Bangkok Airways

Bangkok Airways has entered into a partnership with South Korea’s Lotte to bid for concessions to operate duty-free space at Bangkok’s Suvarnabhumi Airport and three regional airports in Chiang Mai, Hat Yai and Phuket airports.

Both companies will form a 50:50 joint venture, according to local media reports.

Bangkok Airways president Puttipong Prasarttong-Osoth was quoted saying that the joint venture with Lotte has increased the possibility for the Thai airline to win the concession as Lotte is recognised as a global brand and is experienced in running the duty-free at South Korea’s Incheon airport.

Apart from Bangkok Airways, there are four other companies that bought bid envelopes from the Airports of Thailand. They are Central Group, partnering with Duty Free Singapore, Minor International, joining forces with the group of restaurants in duty free, the former operator King Power Duty Free, and Royal Orchid Sheraton Thailand.

Currently, around 60 per cent of Bangkok Airways are generated from the airline business. However, it is trying to diversify into other businesses that can help it grow sustainably in the long term.

“The airline business is facing a very fierce competition and gaining less profit over the past three to four years. Therefore, we consider duty free business will give us the better profit and sustain our income in the long run,” said Puttipong, as quoted by the local media.

Earlier, it also set up a consortium with BTS Group and Sino-Thai Engineering & Construction to vie for the management concession of U-Tapao airport and the Eastern City Development Project with an operator of Japan’s Narita airport. This concession requires an estimated investment cost up to 100 billion baht over the first 10 years.

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