Incheon Airport T1 Closing Duty-Free Shops, Temporary Operation by Shinsegae and Hyundai

[Asia Economy Reporter Dongwoo Lee] Incheon International Airport Corporation has decided to expand the store areas and temporarily operate existing operators' duty-free shops at some duty-free stores in Terminal 1 of Incheon International Airport, which will cease operations at the end of this month, to provide duty-free services and resolve employment issues.

Incheon Airport Corporation announced on the 24th that as the extended operation of the T1 duty-free business rights of Lotte Duty Free and Shilla Duty Free will end on the 28th, it will promote the expansion of store areas and temporary operation by existing operators such as Shinsegae, Hyundai Department Store, and Gyeongbokgung Duty Free.

The three companies are planning to extend operations for three of the four T1 business rights (DF2, 3, 4, 6) previously operated by Lotte and Shilla Duty Free, specifically DF3, DF4, and DF6. The final decision will be made through the Korea Customs Service's "license review" scheduled for the end of this month following the existing operators' "capacity expansion application."

The DF2, 3, 4, and 6 business rights at Incheon Airport Terminal 1 have been extended and operated by Lotte and Shilla Duty Free since August last year. However, since bonded licenses under the Customs Act cannot be extended for more than six months, the corporation has established a close cooperation system with government agencies and duty-free operators in preparation for the end of the extended operation at the end of this month.

In particular, at a government discussion forum on issues and improvement directions for the duty-free industry held at the National Assembly on January 20, the plan to maximize the expansion of existing operators' licensed areas to address employment issues following the end of the extended operation of duty-free shops at Incheon Airport Terminal 1 was publicized.

Accordingly, Incheon Airport Corporation, in cooperation with the Korea Customs Service, has led a plan to expand the licensed store area up to 100% of the area previously operated by existing operators for the licensed items at Terminal 1, thereby ensuring employment succession.

Subsequently, Incheon Airport Corporation actively inquired about the willingness of existing operators (Shinsegae, Hyundai, Gyeongbokgung, Grand) to expand their store areas to ensure maximum employment succession of workers. According to the notice on bonded licenses, existing duty-free operators can secure additional areas and operate duty-free shops with the approval of the Korea Customs Service.

To stabilize employment for duty-free shop workers, Lotte and Shilla Duty Free, whose extended operations are ending, will also be supported by the corporation to allow existing operators to use the interior and fixtures of the closed stores without additional costs, as the corporation has postponed restoration.

However, due to ongoing deficits in duty-free shops and the reality that operators cannot be forced to continue business against the wishes of partner brands, it has not been possible to maintain all existing brands or succeed in employment for all workers.

Kim Kyung-wook, President of Incheon International Airport Corporation, stated, "We plan to promptly implement follow-up measures such as expanding and revitalizing non-stop flights, strengthening the implementation inspection of the memorandum of understanding on partner company employment maintenance, and reviewing bidding conditions for successful subsequent bids to quickly normalize duty-free shops at Incheon Airport by ensuring employment stability for duty-free shop workers and providing uninterrupted duty-free services.”

Meanwhile, despite an emergency management situation with a deficit of approximately 426.8 billion KRW last year, Incheon International Airport Corporation has fully supported the duty-free industry through rent reductions of 474 billion KRW, payment deferrals of 240 billion KRW, and flexible operating hours. This year, rent reductions are expected to amount to about 600 billion KRW, and the corporation plans to make every effort for mutual growth between the corporation and the duty-free industry.

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