Wed, 19th August Cardiff 20°
Nation.Cymru wordmark
Advertisement

News

Bristol Airport instructs lawyers to demand details on multi-million-pound subsidy for Cardiff Airport

By Emily Price
A Vueling plane at Cardiff Airport

Emily Price

Lawyers working on behalf of Bristol Airport have written to the Welsh Government demanding more details on a multi million pound subsidy for Cardiff Airport.

Earlier this month, Bristol Airport's Chief Executive Officer Dave Lees wrote to Cabinet Secretary for Economy Rebecca Evans raising concerns about the cash award.

Welsh ministers had published a written statement in April outlining plans for a £20m investment in Wales’ only international airport – purchased by the Welsh Government in March 2013.

But the following day, the UK Subsidy Transparency Database showed that the Welsh Government actually plans spend £205.2 on Cardiff Airport.

[mid-content-banner]

'Distort'

Mr Lees said the subsidy would "exceed Cardiff Airport’s current annual turnover" in each year of the planned 10-year duration and "distort competition between airports and airlines".

He raised fears that the funding would risk reducing air travel choice for customers, including those living in south Wales.

The chief executive of Regional & City Airports, which is responsible for Bournemouth and Exeter, also criticised the Welsh Government’s plans.

Andrew Bell said: "It raises fundamental questions about fairness, transparency, and the strategic
direction of regional aviation policy in the UK."

The Welsh Government says the multi-million pound cash injection is "aimed at growing the local economy further by realising the full potential of Cardiff Airport’s presence in Wales."

[lower-mid-content-banner]

Concerns

Now, a legal team working on behalf of Bristol Airport are requesting detailed information about how the Welsh Government addressed concerns raised by the Competition and Market Authority’s Subsidy Advice Unit when ministers first announced the subsidy last year.

The lawyers are also questioning why the Welsh Government does not consider Cardiff International
Airport to be "an ailing or insolvent enterprise".

Mr Lees said: "We have publicly called for details to be urgently made available on the proposed subsidy including the benefits it will deliver, what alternatives have been considered, how the impacts have been assessed, in the context of the significant additional cost burden to the taxpayer in Wales.

"There have been repeated attempts by Members of the Senedd and others to seek further detail on how Welsh Government intends to respond to the concerns raised in the CMA assessment has also been unsuccessful, resulting in a serious lack of transparency around this unprecedented subsidy in UK aviation, which is being funded at great expense by the taxpayer.

"It is therefore appropriate for our legal team to make a formal pre-application request to the Welsh Government for more detailed information on the proposed subsidy, as there has been insufficient detail published or shared to date to fully understand how the subsidy will be used."

The Conservatives in the Senedd say the Welsh Government's handling of Cardiff Airport raises "serious questions about transparency, fiscal responsibility, and fairness to taxpayers."

Solutions

Shadow Cabinet Secretary for Transport & Infrastructure, Sam Rowlands MS, said: "Labour’s continued mismanagement of Cardiff Airport has seen them pour hundreds of millions of taxpayers’ money into propping up the failing airport since its nationalisation.

"Despite repeated calls for transparency, Labour has failed to provide clear answers on how this money will be spent or why alternative solutions haven’t been considered - their refusal to engage in meaningful scrutiny is deeply concerning.

"The Welsh Conservatives firmly believe that Ministers in Cardiff Bay lack the essential expertise required to manage an airport effectively. An experienced private sector corporation, with a proven track record in the aviation industry, would be far better equipped to ensure that Cardiff Airport not only survives but thrives."

A Welsh Government spokesperson said: "Under Welsh Government ownership, the Airport has always been operated at arms length and on a commercial basis

"We recognise the importance of Cardiff Airport to the Welsh economy and believe very strongly that, with the right investment, the Airport has the potential to make an even greater contribution, creating hundreds of additional jobs and boosting regional GVA.

"Welsh Government investment will allow Welsh Ministers to focus the strategic direction of the Airport on the delivery of long-term economic growth with a view to realising these benefits.

"We acknowledge the correspondence received from Bristol Airport regarding the subsidy and will be responding as we consider appropriate in due course."

For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.

Get more trusted Welsh news

Choose Nation.Cymru as a preferred source in Google News to see more of our journalism.

Choose Nation.Cymru as a preferred source in Google News

33 comments

Barnaby

Mr Lees should rest easy because under Boris Johnson's Internal Market Act the Welsh Gov are forbidden to do anything that might inconvenience or annoy England. Unfortunately it doesn't appear to work in the other direction.

Reply
Rob

Quote: He raised fears that the funding would risk reducing air travel choice for customers, including those living in south Wales. Right because more flights operating in and out of Cardiff would mean customers in South Wales, would be able to fly from South Wales this would somehow be an inconvenience for them? Quote: “distort competition between airports and airlines”. Do you know what else counts as distortion? Lobbying the UK Government to prevent the devolution of Air Passenger Duty to Wales even though every other UK nation already has the power to set this rate. Bristol is well within its rights to lobby the West of England Authority for financial aid, or even demand further devolution of powers to their English regions. But they have NO right to tell our Welsh Government what they can or cannot do with their autonomy, or act of though as if you know whats best for us.

Reply
Frank

Is Bristol Airport as keen to hound other airports as quickly as they are with Cardiff Airport? Again, they are throwing their toys out of their prams just like infants. Grow up for goodness sake.

Reply
Nobby Tart

Indeed. I've never heard Bristol Airport complain about the airports at Southampton, Bournemouth and Exeter.

Reply
Hal

There's a hint of political shenanigans in these words: "in the context of the significant additional cost burden to the taxpayer in Wales" It's the job of a CEO to worry about shareholders not taxpayers.

Reply
Steve D.

It seems Bristol airport is worried about the help Cardiff airport is getting from the Welsh government and yet for many years it itself was helped a great deal by the UK government and at the expense of Cardiff. Cardiff airport must be allowed to thrive too.

Reply
Peter J

i am curious to know what support the UK government has given Bristol at the expense of Cardiff? it is worth saying the support for Cardiff airport fromWG is unpopular with people in north wales (well, those who follow politics). The acquisition and debt costs have been substantial and obviously you get minimal benefit if you’re north of Brecon!

Reply
Hal

Two thirds of the Welsh population live in the Cardiff Capital Region and Swansea Bay City Region. The north has good direct access to Manchester airport which is a proper international airport unlike Bristol that only offers regional short-haul flights. And Bristol was owned by the state for 40 years, throwing money at it for new equipment, roads and terminals, and some sort of deal with easyJet, before it grew to the point the private sector were interested in it.

Reply

In reply to Hal

Peter J

On the latter, I'm not sure that argument quite stacks up; Bristol and Cardiff would have been put in majority private ownership around the same era. easyJet started flying from Bristol after privatisation. I use to fly a lot around Europe over the past few years, and my anecdotal impression of the airport industry, is that large airports have got bigger at the expense of smaller rivals. It's not surprising given the financial model of airports, which now rely on retail/parking for revenue. Airlines tend to pick destinations based on a number of factors but key is the population of the surrounding area and it's relative wealth, both of which put Bristol at a significant advantage. In my view, Bristol have a good argument that this contravenes anti competition laws. Let's hope WG have been savvy and have used the subsidies to support areas of the airport that aren't in direct competition to Bristol such as maintenance. As for us, the tax payer, I can't see any private enterprise stepping in at Cardiff international. It will almost certainly be a bind on tax payer for many years to come. And also a reform policy at the 2026 election -'scrap labours 200m subsidy to Cardiff airport '!

Reply

In reply to Peter J

lufccymru

What contravenes anti-competition law is that Bristol have control of air passenger duty but Cardiff doesn't. Also, I live in north Wales and I fully support our only major airport getting the support it needs and hopefully APD being devolved too so that the tax payer doesn't have to contribute so much.

Reply

In reply to lufccymru

Peter J

Are you sure? Air passenger duty is not controlled by Bristol, but by HMRC, and is the same across the UK. Normally it's the airlines who have to pay to HMRC (obviously passed on to passengers) and nothing to do with the airport, as far as I know. On a personal level, I use to support Cardiff recieving tax payer funding. It feels like throwing good money after bad now.

Reply

In reply to Peter J

Barnaby

Scotland and Northern Ireland have control of APD. Presumably the OPs point is that if APD wasn't helping Bristol keep its market dominance the English administration could tweak it. The same doesn't apply in Wales. And all successful economic regions need an airport. Your proposal to give up is the same as giving up on the economy of south Wales. The airport isn't even loss making according to Business Live which stated in March that "in its last financial year the airport posted an Ebitda (earnings before interest, tax, deprecation and amortisation) of £5.8m".

Reply

In reply to Barnaby

Peter J

The APD is the same in Cardiff and Bristol! Why do you say this ensures a market dominance? I'm not giving up the slightest on the economy of South Wales - with respect, that is a little hyperbole on your behalf. It's worth pointing out Slovakia has seen the largest, (possibly second largest), GDP growth in europe over past 20 years has a small airport, and reliant on airports across two borders for connectivity. Why is EPITDA a metric for assessing profitability in airports?!

Reply

In reply to Peter J

Barnaby

APD cements incumbent advantage. According to Investopedia EPITDA is "used to assess a company's profitability and financial performance". https://www.investopedia.com/terms/e/ebitda.asp Why should an airport be any different to any other business? That's the argument from Bristol that essentially treats the two businesses as competing supermarkets with one supermarket unfairly getting support from the council. This debate wouldn't be happening if they were seen for what they really are - critical economic infrastructure assets. Imagine Bristol council complaining that the Welsh Gov adding a lane to the M4 was disadvantaging the M5. That's actually how absurd this debate treating infrastructure as a business really is.

Reply

In reply to Barnaby

Peter J

As someone with board level experience, EPITDA is widely considered to make financial performance far better than it is, which is not surprising to see it used in this context - WG would want to exaggerate performance. Gross profit is all most people really care about. Maybe you're right about APD cement incumbent, maybe you're not - but I really can't see this being the source of Cardiff's problems

Reply

In reply to Peter J

Barnaby

Gross profit can also mislead. A one-off expense that won't apply again can mask an otherwise strong performance. A one-off windfall such as selling an asset can boost an otherwise mediocre year. APD isn't the source of Cardiff's problems, that was an incompetent private owner running it into the ground. APD is the barrier to recovery because airlines run on tighter margins than ever before and APD is a big chuck of the ticket price customers are prepared to pay. This means other costs must be squeezed even further. It should be obvious that an airline running 100 flights per day will have massively lower per-pax costs than the same airline running two flights per day which is reflected in ticket prices that keep customers travelling huge distances. While this sort of extra per-customer overhead for small operators is always a barrier in any market where existing operators have huge market share and super-efficient operations, it's rare to have a fixed government charge slapped on top. It turns viable propositions into non-starters. It keeps small operators and potential competitors out of the game. It's distorting the market for no benefit at all. Even the environmental argument for APD is mute if it results in much longer surface journeys and, in the case of Heathrow more fuel being burnt due to extended taxiing and stacking times.

Reply

In reply to Peter J

Hal

Go (which became easyJet) started at Bristol very shortly after it was completely privatised so both negotiations would've run in parallel and no doubt influenced each other. It wasn't the privatisation of Cardiff that caused the problem. It was doing fine until it was sold to a Spanish toll road company who ran it like a toll road. There's no automatic magic pixie dust in the private sector. A bad owner can trash any successful business. Just look at Tesla. Your observation about large vs small airports is correct but ignores the systemic reason. APD is a large immovable chunk of the price consumers want to pay for a ticket. That forces airlines to squeeze their other costs harder than they might otherwise need to. This can only be achieved by economy of scale which means squeezing more pax into a smaller number of airports, expanding already busy airports at the expense of smaller ones, damaging economic resilience and consumer choice. And your point about airports being chosen based on the local population isn't true. As proven by airlines hunkering down in a small number of oversubscribed airports, they can do this because people will travel great distances to get the right flight at the right price. How many from south Wales travel past Bristol and Heathrow to fly from Luton, Stansted or Gatwick to save a few quid? That wouldn't happen if airports only served their regional markets. It's a false argument to say Cardiff is too poor for an airport. The problem is market distortion caused by APD.

Reply
Frank

In 2024 837,400 passengers flew from Cardiff Airport compared to 10,000,000 from Bristol. Why is Bristol Airport so concerned and so jealous?

Reply
Jeff

Potential. Last went to Bristol last year for a pickup. It's awful to get to, parking is a rip off. It was not a nice experience.

Reply
Peter J

Even if they were to pick off 100k passengers from Cardiff, this is extra revenue and well worth the legal fees!

Reply
lufccymru

It also regularly gets diversions if its windy or misty. It's a rubbish airport.

Reply
Hal

Since Bristol controls over 90% of the regional market perhaps the CMA might like to investigate this dominance to see if it's in the consumers best interests. These sinister efforts to strangle competition in a market where the APD tax regime makes it almost impossible for rivals to enter the market without temporary support suggest otherwise.

Reply
R W

I agree. If a supermarket had 90% of the market in any particular region, the competition authorities would intervene to put a stop to it, so why should it be any different in the airline industry? Bristol Airport needs to be brought down in size. to level out the playing field.

Reply
Gerallt Llewelyn Rhys.

Sounds like Bristol airport will take the issue to the high court. That seems fair enough.

Reply
Hal

How does a company that's cornered the market make a successful complaint about unfair competition without it looking like a flagrant abuse of its dominant position?

Reply
Rhod

How is it fair Geraint? Our government own our only international airport, what concern is it to Bristol what we do with our property?

Reply
Dai Ponty

Here we go again do the people of Wales need any more bloody proof how bad the London governments treat Wales by the Tories and Labour they in London control our airport with taxes it might be owned by the Welsh government but london got the final say. First the H S 2 ROBBED BY ENGLANDOF BILLIONS OF £ paid to Scotland and Northern Ireland nothing to us ROBBED BY LONDON GOVERNMENT for the money that should come to us from crown land like offshore wind farms but goes to the Royal PARASITES and now Cardiff Airport to say i am real ANGRY is an understatment WE NEED OUT OF THE U K

Reply
Ashley

Another reason for Wales to go it alone. They'll do and say anything to try and stop any cash being spent this side of the bridge.

Reply
Glen

Cardiff airport could help itself by slashing parking charges. What do they gain by charging a small fortune to leave your car there while having hundreds of empty parking spaces?

Reply
Barnaby

It's cheaper than Bristol, unless you choose the option of handing your keys to a stranger who might take it for a spin or run some county lines errands but at least you save a few quid.

Reply
Garycymru

Another good reason to distance ourselves from the UK. If fair competition isn't allowed, Wales shouldn't be part of it.

Reply
Steve Woods

Sour grapes are a big menu item at the former Lulsgate aerodrome.

Reply
Rhod

How dare the Welsh have a functional airport! Didn't Westminster put a stop to a new runway in Cardiff because it would take business away from Bristol? Why is that okay but the Welsh government investing in a Welsh airport is bad? Surely it's time we give England the middle finger and go it alone, we've had nearly a thousand years of English rule now

Reply

Leave a reply

Replying to Steve D. Cancel

It seems Bristol airport is worried about the help Cardiff airport is getting from the Welsh government and yet for many years it itself was helped a great deal by the UK government and at the expense of Cardiff. Cardiff airport must be all...

Comments are reviewed before they appear.