King Power is seeking the termination of a contract with Airports of Thailand Plc (AoT) for its duty-free business at five international airports in an announcement that sent AoT shares into a dive on Monday.
The airport agency said on Monday that King Power Duty Free Co had informed it of its intention to cancel the contract to operate duty-free shops at Suvarnabhumi, Don Mueang, Chiang Mai, Phuket and Hat Yai airports.
King Power Duty Free Co is an arm of King Power Corp, which dubs itself the king of duty free.
The company cited the impacts on its business from the government's decision to lower levies on wine; a continued drop in tourists, especially from China due to safety concerns; the Covid-19 pandemic; and geopolitical and trade wars.
The announcement by AoT caused its stock to plunge, closing at 28.50 baht, down 1.25 baht or 4.20% in the morning session. It confirmed speculation that was spread on news outlets on Friday put pressure on AoT stocks last week.
It also came after King Power Corp appointed Nitinai Sirismatthakarn as the new chief executive officer on June 4, replacing Aiyawatt Srivaddhanaprabha, who moved to the role of executive chairman.
Mr Nitinai was the AoT president for two four-year terms from 2015 to 2023.
Dome Kunprayoonsawad, an analyst on the aviation sector at Pi Securities, said on the company's YouTube programme on Monday that he did not expect King Power to walk away from the duty-free business at the five airports.
King Power only wanted to renegotiate the existing contract with the airport agency and expected its talks with AoT to find a way out on the issue, Mr Dome said.
King Power anticipated more air travellers at Suvarnabhumi after the pandemic and the operation of its satellite, Sat-1 to serve more passengers, he added.
King Power won the bid to operate duty-free shops at Thailand's international airports in 2019.