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| Incheon International Airport Corp. (IIAC) President and CEO Kim Kyung-wook speaks during a media conference held at the IIAC headquarters in Incheon, Wednesday. Courtesy of Incheon International Airport Corp. |
IIAC expects net loss of more than W800 billion this year
By Jun Ji-hye
Incheon International Airport Corp. (IIAC), the operator of the country's main gateway, is striving to help duty free shopping at the airport stay alive amid the prolonged COVID-19 pandemic, IIAC President and CEO Kim Kyung-wook said Wednesday.
The comment came amid growing concerns over more empty space in the duty free area at the airport as the nation's two major duty free operators ― Lotte Duty Free and Shilla Duty Free ― are scheduled to close their stores in Terminal 1, Feb. 28.
Their leases had originally expired last August but they extended them for another six months after the IIAC failed to attract new duty free operators amid the industrywide slump caused by the pandemic.
Kim said during a media conference that the IIAC will allow the three existing duty free operators at Terminal 1 ― Shinsegae Duty Free, Hyundai Department Store Duty Free and Kyung Bok Kung Duty Free ― to expand their stores temporarily to spaces that will be vacant following the exit of Lotte and Shilla.
"The IIAC is making every effort to fill up empty space in the duty free area and help maintain employment stability," Kim said. "We have been cooperating with government organizations and duty free operators to ensure new operators employ workers from the exiting operators."
Lotte and Shilla have used the DF2, DF3, DF4 and DF6 sections in the duty free area at Terminal 1.
Shinsegae, Hyundai Department Store and Kyung Bok Kung will be able to expand their operations to DF3, DF4 and DF6 after talks with the Korea Customs Service.
But the operation of the DF2 section that sells perfumes and cosmetics will be terminated, IIAC noted, adding that it could not keep operations going there as duty free operators have been suffering deepening financial difficulties amid the pandemic.
"It is regrettable that the rehiring of every employee will not be possible despite our utmost efforts," Kim said. "We will continue to work hard to stabilize employment and improve duty free services by coming up with follow-up measures, including the review of bidding rules to attract new duty free operators."
Kim noted the IIAC will continue to mull ways of filling the empty space, which will account for about 25 percent of the entire duty free area, adding that duty free services are directly related to the airport's global competitiveness.
The airport operator's attempts to auction duty free licenses three times last year ― in February, September and October ― were unsuccessful due to a lack of participants. Duty free operators have been suffering amid a sharp fall in the number of people flying due to air travel restrictions.
Incheon International Airport suffered a net loss of 426.8 billion won ($384 million) last year, its first in 17 years, with the number of international passengers using the airport falling 83 percent from a year earlier.
The airport operator said it expects a net loss of 860.9 billion won this year, noting that it expects air travel demand to recover in the latter half of the year at the earliest, after more people around the world get vaccinated for the coronavirus.
"I think air travel demand will increase suddenly at some point as many people stuck at home amid the pandemic are longing for overseas travel," Kim said. "We will make thorough preparations for that."
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