Tensions are rising between Incheon International Airport Corporation (IIAC) and major duty-free operators as disagreements over lease reductions escalate. Industry insiders now warn that some duty-free stores may shut down, signaling a deepening crisis in South Korea’s once-thriving duty-free sector.
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| The Shilla Duty Free at Incheon Airport |
Shinsegae Duty Free and Shilla Duty Free have requested court arbitration to adjust their lease at Incheon Airport’s Terminal 1. While the first hearing occurred on June 30, IIAC announced it would not attend the second hearing on August 14, citing concerns over fiduciary duty.
One duty-free official stated: “If the airport refuses court-led mediation, businesses have no choice but to withdraw.”
Both Shinsegae and Hotel Shilla are suffering heavy losses, with one operator reporting over ₩6 billion (approx. $4.6 million) in monthly deficits. Despite this, lease terms remain unchanged.
In contrast, global airports like Changi, Narita, and Hong Kong International introduced rent waivers or sales-based rent models during the pandemic to support tenants.
Although 2.53 million passengers passed through Incheon in June 2025 — up 7.1% year-over-year — duty-free sales dropped 9.5% to ₩1.085 trillion. Experts blame weak high-end spending by foreign tourists, particularly from China.
If duty-free operators exit, Incheon Airport could face major revenue losses and travelers may experience reduced convenience. The duty-free industry criticizes IIAC for avoiding responsibility under the pretense of avoiding legal liability.
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| Shinsegae duty free at incheon airport |
Learn Korean Through This News
Korean Text:
“면세업계 업황이 갈수록 악화되는 가운데 인천국제공항 내 면세점이 문을 닫게 될 수도 있다는 우려가 커지고 있다. 인천국제공항공사(이하 인국공)가 임대료를 낮추기 위해 면세점업계가 법원에 제기한 중재에 응하지 않으며 갈등이 심화되고 있기 때문이다.”
Key Vocabulary:
- 면세업계 – duty-free industry
- 업황 – business conditions
- 갈수록 – increasingly, more and more
- 악화되다 – to worsen
- 가운데 – in the midst of, among
- 인천국제공항 – Incheon International Airport
- 면세점 – duty-free shop
- 문을 닫다 – to shut down, close
- 우려 – concern, worry
- 임대료 – rent
- 법원 – court
- 제기하다 – to file (a complaint/lawsuit)
- 중재 – arbitration, mediation
- 응하다 – to respond, accept
- 갈등 – conflict
- 심화되다 – to deepen, intensify
Grammar Notes:
~는 가운데: used to describe a situation happening during or amidst another situation예: 악화되는 가운데 = while (business conditions) are worsening
~게 될 수도 있다: expresses a possibility of something happening
예: 문을 닫게 될 수도 있다 = may end up closing
~기 위해: to do something for the purpose of ~
예: 임대료를 낮추기 위해 = in order to lower the rent
~기 때문이다: used to explain the reason for something
예: 갈등이 심화되고 있기 때문이다 = because the conflict is intensifying
Translation:
"As the duty-free industry continues to worsen, concerns are growing that duty-free shops at Incheon International Airport may have to close. This is because Incheon International Airport Corporation (referred to as "InKukGong") is refusing to respond to the arbitration filed by the duty-free sector to lower rent, further intensifying the conflict."
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