AT THURSDAY’S hearing before the Senedd’s public accounts and public administration committee, Welsh Government officials revealed that there is currently no “exit plan” for the government to sell Cardiff Airport. This statement came during a session where airport executives and government officials faced questions about a proposed £206 million subsidy intended to support the airport’s growth and development. This move, if approved, would mean the government has invested nearly £400 million in Cardiff Airport since its acquisition in 2013.
Andrew Slade, the Director General for Economy, Energy, and Transport, defended the government’s stance, highlighting the strategic importance of the airport for Wales. “We are committed to the airport and ministers are very clear that Wales needs to have an international airport,” he stated, emphasising the economic contributions and potential surrounding Cardiff Airport. He acknowledged the long-term possibility of exploring different ownership models but indicated that such considerations are not a priority at present.
This proposal aims to boost job growth linked to the airport and attract new airlines and routes, with a target of increasing passenger numbers to over two million annually. Planned upgrades to the terminal and facilities are also part of the proposed investment. While the subsidy has been sent to the Competition and Markets Authority for review, Slade confirmed that their advice would not be binding, leaving the final decision to the Welsh Government.
Challenges in attracting airlines
During the hearing, Cardiff Airport’s Chief Executive, Spencer Birns, disclosed ongoing discussions with airlines such as Jet2, EasyJet, and Ryanair to establish operations at Cardiff. However, he noted that these airlines currently do not see Wales as a “significant marketplace” for investment. Birns explained that while the airlines using Cardiff Airport are growing, the airport has faced challenges in replacing carriers that have pulled out, notably Wizz Air, which was an integral part of their growth strategy. He emphasised that while the airport has recovered 52% of its 2019 passenger volume, achieving pre-pandemic targets remains difficult due to the limited availability of aircraft and a tendency for airlines to prioritise larger markets.
Passenger targets and financial details
The airport had previously set a target of 1.3 million passengers, but this milestone is now expected to be reached two years later than initially planned, by March 2028. Birns attributed this delay to the withdrawal of Wizz Air and route cancellations by airlines like Ryanair. Despite these setbacks, he pointed out a 7% growth in passenger numbers for 2024, asserting that Cardiff Airport is on a positive growth trajectory.
Questions about the financial aspects of the airport’s operations were also raised during the hearing. Conservative MS Natasha Asghar sought detailed information on how the funds provided by the Welsh Government have been utilised. Slade agreed to provide a summary to the committee but cited commercial sensitivities and security concerns for not disclosing more specific details.
The committee discussed the cost implications of upgrading airport facilities, including the installation of new security scanners. While these scanners were included in the airport’s rescue and restructuring plan, the actual costs exceeded initial estimates. Mr. Slade explained that retrofitting modern equipment into a terminal designed in the 1970s presented significant challenges, leading to additional expenses. Cardiff Airport was allocated an extra £6.6 million by the Welsh Government in October to cover these costs.
Environmental considerations were also highlighted, with Birns reporting a 60% reduction in carbon emissions at the airport over the past four years, from 1,700 tonnes to under 600 tonnes of CO2 annually. This reduction was achieved through measures such as switching to electric vehicles, using renewable energy, and minimising natural gas consumption. The airport aims to further cut its emissions by 50% within the next five years, aligning with Wales’ broader environmental goals.
Impact on the Welsh economy
The airport’s role in Wales’ economy was underscored, with Birns stating that Cardiff Airport generates approximately £200 million in economic value, working with 50 companies and supporting 4,000 jobs. The proposed £206 million subsidy is seen as a means to sustain and enhance this economic contribution.
However, the airport has struggled to retain and attract international routes. The direct flights to Doha with Qatar Airways, which were suspended during the pandemic, have yet to resume. Negotiations with Qatar Airways are ongoing, but details remain commercially sensitive.
The proposed subsidy and the future of Cardiff Airport have sparked debate among Welsh politicians and the public. Critics argue that the airport has not met growth expectations and question the continued injection of taxpayer money. Some point to other regional airports, such as Teesside, which have recovered more rapidly post-pandemic and have clearer plans for financial sustainability.
In contrast, supporters emphasise the strategic importance of maintaining an international airport in Wales, not only for travel convenience but also for the economic and employment benefits it brings. The Welsh Government’s commitment to the airport, despite its challenges, reflects a belief in its potential to contribute significantly to the region’s growth and connectivity.
As the Welsh Government awaits the Competition and Markets Authority’s advice on the subsidy, the future of Cardiff Airport hangs in the balance. Whether this latest investment will spur the airport towards its ambitious growth targets remains to be seen. However, for now, the government appears steadfast in its support, with no plans for an exit strategy in sight.
