Svarnabhumi in the balance
The retail stores at Bangkok’s new Suvarnabhumi International Airport were truly a generation on from those in the old Don Muang Airport. After numerous delays, the airport opened in September to a welcome from travellers and the Thai public. In a major retail investment, King Power International was managing some 10,000sqm of duty free stores, and a space of over 27,000sqm encompassing food and beverage, entertainment and other commercial space.
The retailer had achieved much in spite of the limitations of Don Muang, where it was the incumbent, but the Suvarnabhumi concessions have taken its business to another level. King Power elevated its core duty free offerings and introduced new retail concepts to the $4bn airport. There is innovation – the Shades of Time watch and sunglass outlet being one trendy example – and the application of walkthrough concepts. Most stores are free-standing, with walls and ceilings minimised to increase natural light.
Suvarnabhumi has not shaken off its troubles, however. In February this year, the Thai government
announced that it would recommission Don Muang to handle some domestic flights, in an effort to ease congestion and flight delays at the new airport. Theera Haocharoen told media that the decision to move back to Don Muang was based on a series of problems that have plagued Suvarnabhumi, from cracks on the taxiways to out-of-order aerobridges. Airport management say that they are addressing the issues, and point to the likes of Hong Kong International Airport, which also experienced teething problems.
Concerns that the new airport was soon likely to reach its 45 million passenger capacity mean that Don Muang may be back in service for a while longer. As only about 140 domestic flights were affected, King Power’s duty free business was not significantly impacted, and airline services have adjusted.
That was before the AOT announced on March 22 the termination of the duty free and commercial concessions. Although the airport authority did not make the decision immediately effective, allowing King Power to continue trading, subsequent developments have not pointed to a resolution. In April the Office of the Attorney-General was examining contracts for retail as well as parking and infrastructure.
King Power reserved comment when contacted by Frontier, and along with the AOT has made only limited statements to the press. Local media have reported allegations of legal breaches in the negotiating of contracts at the airport, highlighting an alleged failure for the agreement to King Power to be approved as required by the 1992 Public-Private Joint Venture Act.
To passengers passing through Suvarnabhumi, there’s little to inform them of the stand-off, with the retail sector trading briskly. The arrivals area greets visitors with a smart and targeted offer; departing passengers can move between high-end Bvlgari boutiques, Thai souvenir goods or trendy homeware. The question is – for how long? n
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