Last week, Lotte officially requested Incheon International Airport Corp. adjust the lease fee to reflect sales as it cannot pay rent for the remaining period of its five-year contract due to drastic changes in the business climate, including a plunge in the number of Chinese tourists.
In 2015, Lotte Duty Free signed the deal with the operator of the country's main gateway, located west of Seoul, to pay rent totaling 4.1 trillion won ($3.6 billion).
According to the sources, IIAC is maintaining the stance that it cannot cut the lease. It is expected to soon deliver a formal reply to Lotte.
Lotte has been struggling to cope with the fallout from the sharp decline in the number of Chinese tourists, its main customers, since China imposed a ban on selling package tours to South Korea since mid-March in an apparent retaliation for the deployment of a Terminal High Altitude Area Defense battery.
The ban dealt a harsh blow to the local duty-free industry. Chinese tourists accounted for nearly 47 percent of all tourists coming to South Korea last year.
The company said it expects to suffer a 200 billion-won deficit this year and a 1.4 trillion-won loss over the five-year period. (Yonhap)