Bangkok Airways eyes duty-free shops
SET-listed Bangkok Airways Plc (BA) has vowed to bid for a concession to operate duty-free shops at the country’s main airports.
President Puttipong Prasartthong-Osoth said the airline is in talks with three leading duty-free operators in Asia and in Europe to collaborate on managing the duty-free segment for Airports of Thailand (AoT), a duty-free shop concession holder.
Mr Puttipong said details of the investment and business collaboration will be concluded in the next few months.
When the AoT opens concession bidding for the operation of duty-free shops at major international airports this year, Bangkok Airways will join the race, he said.
AoT is expected to conclude the term of references for the bid in the next few months to find a new duty-free shop operator, two years before the end of the existing contract that allows King Power International Co to manage the duty-free business exclusively.
“Bangkok Airways is ready to join the bidding not only at Suvarnabhumi airport but also at U-tapao airport,” Mr Puttipong said. “Tourism growth will drive duty-free business to grow strongly.”
He said the duty-free business is a core segment in which the company plans to increase its presence in the future.
Several months ago, the company formed a new business unit to operate duty-free shops under the brand More Than Free at Samui, Surat Thani, U-tapao and Luang Prabang airports.
“The duty-free business is considered a big move for the airline, following several business we had commenced over the past 10 years such as catering, ground handling and cargo business,” Mr Puttipong said.
He said that if the airline fails to win the bid, it will be continuing duty-free operations at other airports, such as its own Samui airport.
This year, Bangkok Airways set aside a 3.1-billion-baht investment budget for the expansion of a variety of businesses during 2018-19, including a plan to bid for a concession to operate duty-free business at main international airports.
Mr Puttipong said about 2.1 billion baht has been allotted for the purchase of new aircraft, IT investment, catering and dutyfree businesses.
The remaining 1 billion baht is set to build a new aircraft maintenance centre at its own airport facility in Sukhothai province in 2019. The company has one maintenance centre located at Don Mueang airport.
Mr Puttipong said the airline also needs to have a maintenance centre at Suvarnabhumi airport, the main operations base of the airline. But the project needs approval from the board, he said.
According to Mr Puttipong, Bangkok Airways plans to launch direct flights between Phuket and Yangon in the middle of October this year, with three flights a week. The new route will serve high demand from Myanmar during high season.
Furthermore, the airline will increase the frequency of flights for Bangkok-Trat from three flights a week to four this winter season and Bangkok-Phu Quoc Island from five flights a week to seven.
Mr Puttipong said tourism business will continue to grow this year because of the economic rebound in Europe and Asia.
“Although the Phuket boat incident has negatively impacted tourism in the South, our business has not been impacted much,” he said.
The airline expects the average cabin load factor to be over 70% for this year, while revenue will grow 7-10% from last year’s 28.49 billion baht.
In 2017 the airline carried 5.9 million passengers. The number is expected to grow 7% this year.
BA shares closed yesterday on the Stock Exchange of Thailand at 12.50 baht, up 30 satang, in trade worth 20.7 million baht.