The decision was taken due to the “prolonged” damage that Covid-19 is causing to airport commercial facilities
The South Korean Ministry of Land, Infrastructure and Transport is introducing further reductions in rents for duty-free shops and other business at the country’s airports, including Incheon International Airport, with the scheme to be in place until August.
Following requests from the duty-free industry and taking into account the downward trend of passenger traffic due to the pandemic, the additional support is designed to provide welcome relief to concessionaires at Incheon Airport and those overseen by the Korea Airports Corporation.
The government’s new measures increase the rent reduction up to 50% for large and medium-sized enterprises with commercial facilities at airports, and 75% for small and medium-sized businesses, depending on how far passenger numbers have dropped compared to last year. The reductions last for up to six months (March to August) until the airport reaches 60% of last year’s passenger traffic.
What’s more, for the period of March to August, an additional reduction of approximately KRW28.4bn is also expected to be applied, with concessionaires and other airport commercial facility occupants expected to have made total rental savings of KRW480bn.
The government has also extended the payment deferral period that initially covered the March-May period to a maximum of six months – from March to August.
Aviation Policy Officer of the Ministry of Land, Infrastructure and Transport Kim Taek said: “Commercial facilities located at airports, including duty-free shops, are an essential industrial ecosystem for smooth airport operation, and we hope that this additional support plan will reduce the burden on the industry.
“We plan to recover with the demand for air passengers contracted by Covid-19 and prepare with related organisations and the aviation industry to normalise the stepwise air routes on the premise of quarantine.”
Earlier in the year, the government introduced a 25% reduction in rent for small and medium-sized businesses from March to August, along with payment deferrals for small and medium-sized businesses. Large to medium businesses enjoyed a 20% rent reduction rate before today’s announcement.
in Lead Stories June 1, 2020