BA tacks Lotte onto bid
Joint venture for airport concessions
Bangkok Airways Plc (BA) has named South Korea's Lotte as its partner to vie for concessions to operate duty-free shops at Bangkok's main airport and three regional ones.
The airline, founded by billionaire Prasert Prasarttong-Osoth, also formed a consortium to bid for management of U-tapao airport and the Eastern City Development Project with an operator of Japan's Narita airport.
BA chief executive and president Puttipong Prasarttong-Osoth said the company will submit Lotte as its joint venture partner in bids to Airports of Thailand (AoT) today.
"Lotte was chosen for cultural commonalities and understanding of tourist and passenger behaviours, which should enable us to supply merchandise that meets customers' demands," Mr Puttipong said at a press briefing on Tuesday.
A new joint venture firm will be established to carry out the business.
Mr Puttipong said the South Korean duty-free operator will also be BA's partner in bids to run duty-free shops at airports in Phuket, Hat Yai and Chiang Mai.
The bid submission deadline is May 22, with results to be announced on May 31. The duty-free concession spans 10 years, starting in September 2020.
Mr Puttipong predicted intense bidding with all the big names set to participate.
Bangkok Airways is among five firms that purchased bid envelopes from AoT for the competition to run Suvarnabhumi airport. The others are Central Department Store, King Power Duty Free, Minor International and Royal Orchid Sheraton Thailand.
Apart from BA, the regional contract has attracted King Power Duty Free, Royal Orchid Sheraton Thailand and Central Department Store.
Mr Puttipong said BA has prepared for the non-aeronautical business for years after noticing declining revenue in the global aviation industry over the past 3-4 years.
SET-listed Bangkok Airways reported total revenue of 27.94 billion baht in 2018, down 1.9% from the year before.
The airline received some 5.8 million passengers last year and predicted that volume would increase to 6.1 million in 2019.
Mr Puttipong's father, Mr Prasert, a founder of Bangkok Dusit Medical Services, was last year ranked the eighth-richest Thai billionaire by Forbes with a net worth of 1.04 billion baht.
For the U-tapao aviation project, the airline has joined BTS Group Holdings Plc and Sino-Thai Engineering & Construction Plc to submit a proposal to the Royal Thai Navy under BBS Joint Venture to bid for the U-tapao airport and Eastern City Development Project contracts under an estimated investment cost of some 100 billion baht in the first 10 years.
"We have over 40 years experience and a good track record in managing airports in Thailand," Mr Puttipong said, referring to Koh Samui's airport. "We will bring in the leading operator of Japan's Narita airport to help manage U-tapao."