Travel Retail

South Korea airport announces rent deferral

Korea Airpot duty free

The Korean Ministry of Land, Infrastructure and Transport is to allow airport commercial partners to defer rent payments for three months, from March till May.

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It is one of the measures aimed at supporting the aviation industry through the COVID-19 crisis. The Ministry is providing support that equates to KRW20.7 billion (US$16.2 million) in payment exemptions and KRW385.1 billion (US$301 million) in payment deferrals.

The deferrals cover large and small retailers across the airports network. As reported, Incheon International Airport Corporation has been in discussions about concession support measures for larger retailers at the country’s main gateway.

As reported, the government already announced a relief package for small and medium enterprise (SME) retailers at Incheon on 28 February but the larger players such as Lotte Duty Free, The Shilla Duty Free and Shinsegae Duty Free were controversially omitted.

As part of the latest package, small companies that run commercial operations at airports that have suspended flights will be exempt from concession rent payments until flight services resume. These locations include Jeju, Daegu (the Korean epicentre of the crisis), Cheongju, Muan (international) and Saechon, Pohang, Wonju and Muan (domestic).

International passenger traffic at Korea’s airports in the second week of March fell -91.7 percent year-on-year to 138,000. Daily numbers have reached a new low of 16,000 at Incheon International in March to date. This compares to the high of 234,000 on average in August 2019 and to a pre-2020 low of 27,000 during the SARS crisis of 2003.

SEE ALSO : Incheon International Airport operators request rent adjustment

There are far more staff (approximately 70,000 staff work at the airport) than passengers at Incheon as flight cancellations continue to cut a devastating swathe through both inbound and outbound traffic.

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