Committee grills officials over £206m Cardiff Airport plan

Chris Haines – ICNN Senedd reporter

Senedd members pressed officials about Cardiff Airport’s performance and the Welsh Government plans for a £206m taxpayer-funded subsidy.

Natasha Asghar, a Conservative member of the Senedd’s public accounts committee, quizzed officials about the ten-year subsidy plan which was announced in July.

Andrew Slade, the Welsh Government’s director general for economy, said the Welsh Government is waiting to hear back from the Competition and Markets Authority (CMA).

He confirmed advice from the CMA about compliance with subsidy rules will not be binding.

Ms Asghar pointed out that Bristol Airport is investing £400m over five years and, unlike in Cardiff, it will not cost the public purse a penny.

Mr Slade replied that more than 80% of world airports are publicly owned, stressing that it is incumbent on the Welsh Government as owners to put similar investment in place.

‘In the dark’

Asked if a breakdown of the £206m will be given once the CMA publishes its report, he said the Welsh Government will be able to share more – subject to commercial confidentiality.

Ms Asghar said: “The Welsh Government has received and approved 15 capital expenditure requests of between £50,000 to £1m to date from the airport, totalling £4.6m.

“And three that were requested above £1m, totalling £13m, from a total pre-approved budget of approximately £29m ring fenced until March 2026.”

The shadow transport secretary called for greater transparency, saying: “Quite frankly, that’s a lot of money going to certain things that we are absolutely in the dark about.”

Mr Slade said officials would write to the committee with a summary.

Ms Asghar concluded: “I don’t see the public making a profit from the airport … but I hope you’ll be able to fill me with some confidence because as it stands I don’t have much of it.”

‘Rescue’

Labour’s Rhianon Passmore asked about progress three years into a five-year rescue plan.

Mr Slade said: “The airport’s still with us, doing well, has had a good summer and I would argue that the rescue and restructuring plan has been successful.”

Referring to industry uncertainty created by the pandemic, Spencer Birns, chief executive of Cardiff Airport, said the plan was critical to rebuilding.

He told the committee an assessment, carried out by professional services firm Grant Thornton, estimated the airport generates £200m of economic value.

Mr Birns said at least 4,000 people are employed in the region on the back of the airport.

‘Setback’

Pressed about missing a target of 1.3m passengers, which the airport is not expected to hit for another two years, Mr Birns pointed to the setback of Wizz Air pulling out.

He said the airport, which has seen 7% growth so far in 2024, is short of targets because it has not been able to replace carriers quickly enough.

Mr Birns explained there is a shortage of aircraft and crews, leading airlines to focus on bigger market opportunities first.

Islwyn MS Ms Passmore said the airport held about £50m in March 2023 but has yet to meet conditions for around £30m of the government grants.

Mr Birns said the airport has been keeping cash for compliance and capital investment.

Wayne Harvey, chair of the airport’s operating company, told the committee the airport has £600,000 – of the £42.6m rescue package – left to draw down.

‘Why no Jet2?’

Mike Hedges, a Labour MS who represents Swansea East, said: “I was at Morriston working men’s club and they said ‘why haven’t we got Jet2?’…. Is there something you’re not doing to attract Jet2 which flies from an awful lot of other smaller, regional airports?”

He suggested promoting KLM flights as a “jump-off point” from Cardiff to Amsterdam’s Schiphol airport, where you can fly to almost anywhere in the world.

Mr Birns told members the airport is in talks with Jet2 and other airlines such as Easyjet and Ryanair but they do not yet see Wales as a significant marketplace to invest in.

“They’re fundamentally telling us they’re very happy serving the Welsh market from another airport…,” he said. “That is part of our challenge when we’re dealing with these airlines.”

He agreed KLM, which has been operating at the airport for 35 years, is critical for Wales: “Their flights are rammed and we’re asking them to put more capacity on.”

‘Best value’

Plaid Cymru’s Adam Price pressed the witnesses about spending on security after the Welsh Government announced an extra £6.6m for new 3D airport scanners.

Mr Slade said costs were included in the rescue plan but it came in higher than expected, with Mr Harvey adding that technology costs more than doubled from 2018/19 estimates.

Mr Birns said the scanners were due to be delivered earlier this year but, following supply chain issues, should be operational by the end of 2024.

Mark Isherwood, who chairs the committee, asked about appointments to the airport’s board which are not regulated by the Commissioner for Public Appointments.

Witnesses stressed that public appointment processes were followed nonetheless.

Mr Slade said he was pleased by the “best value” appointment process for a new chair of the holding company, Reg Kilpatrick, and two non-executive directors.

‘Exit plan’

Mr Isherwood raised concerns about the independence, objectivity and impartiality of appointing a non-exec who had previously been involved with the airport for a decade.

He also questioned the resignation of the airport’s finance director in May.

Mr Slade said Geraint Davies has lots of relevant experience “which is hugely helpful”.

And Mr Harvey told the committee Jonathan Scott decided to take a different direction with his career, with a new financial director starting at the end of November.

Closing the evidence session on September 19, Mr Isherwood asked about a change of ownership and whether the Welsh Government has an exit plan.

“We don’t have an exit plan in the way you frame that point,” Mr Slade replied, stressing that Welsh ministers are not “slavishly stuck” to one ownership model or another.