"Save Us" Plea from Duty-Free Shops, but Ministry of Economy and Finance Says "No to Large Corporations"

Ministry of Economy and Finance Stands Firm on Limited Funding Despite Additional Support Requests

Duty-Free Shops Excluded from Employment Support Measures

Terminal 1 of Incheon International Airport is quiet on the 9th. Photo by Moon Honam munonam@

[Asia Economy Reporter Lim Hye-sun] As the duty-free shop industry, which is virtually at a standstill, demands a reduction in airport rent, the government has once again made it clear that "there are no additional support plans for large corporations located in Incheon International Airport Corporation." The reason is that national finances are allocated to those in more difficult situations than large corporations. Accordingly, the damage scale for large corporate duty-free shop operators has also ballooned.

According to the government and the duty-free industry on the 17th, Koo Bon-hwan, President of Incheon International Airport Corporation, acknowledged the difficulties faced by large corporate tenants and requested additional support from authorities. On the 16th, Koo attended a subsidiary agency meeting chaired by Kim Hyun-mi, Minister of Land, Infrastructure and Transport, and said, "Additional support is needed for large and medium-sized tenant companies." Earlier, on the 12th, Koo met with Han In-kyu, President of Hotel Shilla TR Division, Lee Gap, CEO of Lotte Duty Free, and Son Young-sik, CEO of Shinsegae DF, to hear about the hardships of the duty-free industry. In fact, the February sales of Lotte, Shilla, and Shinsegae duty-free shops at Incheon Airport plummeted by more than 70% compared to the same period last year. A duty-free industry official said, "It varies by duty-free shop, but usually 60-70% of airport store sales go toward rent," adding, "In February, due to poor sales, they had to pay 120-150% of sales as rent, resulting in losses."

Despite this situation, the Ministry of Economy and Finance remains unmoved because these are large corporations. The Ministry stated, "Overall funding is limited, and the basic principle is to support small business owners," adding, "The corporation's profits are essentially national finances, and the government is not considering supporting large corporations through policy." Last year, Incheon International Airport Corporation posted a net profit of 890.5 billion KRW, of which 399.7 billion KRW was taken by the Ministry of Economy and Finance as dividends. According to the government's comprehensive livelihood economic measures, Incheon International Airport agreed to reduce Cityplus's rent by 20-30% for six months. However, since the proportion of small and medium enterprises' rent at Incheon Airport is less than 5%, there are criticisms that this is not effectively a support measure for duty-free shops. Last year, the annual rent for duty-free shops at Incheon Airport was 1.0761 trillion KRW, with small and medium enterprises accounting for 3%. Calculated as a reduction amount, it is 5 billion KRW, which is only 0.4% of the total rent.

Despite the government's special support for employment stability in travel and tourism industries, duty-free shops were excluded. According to the 'Special Employment Support Industry Designation Notice for Tourism, Performance, etc.' enacted by the Ministry of Employment and Labor on the 16th, government support such as employment retention subsidies will be significantly strengthened for workplaces in four industries?travel, tourism accommodation, tourism transportation, and performance?over six months until September 15. Employment retention subsidies are a system where the government supports part of the paid leave allowance when employers maintain employment despite business difficulties by implementing paid leave or furloughs. This time, large corporations such as Korean Air were included, but duty-free shops were excluded. There are virtually no support measures for duty-free shop operators.

The employment stability of employees within airport duty-free shops is also becoming unstable. Recently, a post titled "Please help the difficulties of Incheon Airport partner companies" was uploaded on the Blue House National Petition Board. The petitioner said, "As duty-free shop operations become difficult, duty-free companies are implementing cost-cutting self-help measures, but ultimately the victims are partner companies," adding, "Reducing rent to allow large corporate duty-free shops to at least survive will reduce their burden and help partner companies escape the threat of extinction." In this regard, a duty-free shop industry official lamented, "I understand that recently, brands in duty-free shops with deteriorating performance have been notifying non-regular employees of layoffs," adding, "Duty-free shops must survive for numerous small and medium partner companies to survive."

This content was produced with the assistance of AI translation services.